Ordering Information

Tomi on Twitter is @tomiahonen

Follow Tomi on Twitter as @tomiahonenFollow Tomi's Twitterfloods on all matters mobile, tech and media. Tomi has over 8,000 followers and was rated by Forbes as the most influential writer on mobile related topics

Book Tomi T Ahonen to Speak at Your Event

Contact Tomi T Ahonen for Speaking and Consulting Events

Please write email to tomi (at) tomiahonen (dot) com and indicate "Speaking Event" or "Consulting Work" or "Expert Witness" or whatever type of work you would like to offer. Tomi works regularly on all continents

Tomi on Video including his TED Talk

Tomi on Video including his TED TalkSee Tomi on video from several recent keynote presentations and interviews, including his TED Talk in Hong Kong about Augmented Reality as the 8th Mass Media

Users / Subscribers

May 31, 2013

I am regularly frustrated by the unwarranted hype and
excitement around 'location' in mobile. The frustration comes from the fact
that this issue has been studied ad nauseum and yet newcomers to mobile manage
to reinvent the same tired ideas and peddle them as if they would shortly
change the world. They won't. I have been writing the same article about why
location is not the big opportunity in mobile for more than a decade now, and
its time to do that again. Its not that location cannot give 'any' gains or
benefits, there are some. But how to understand location's relevance, I think I
now have the right metaphor. To use location in mobile services is similar to
putting speedbumps for cars on the highway.

THE NUMBERS ARE NOT THERE

Location-based services (LBS) including LBS-based ads were
launched in year 2000, so they are about 13 years of age. First LBS services included the apartment-hunter from Finland, the shopping mall LBS push ads from the USA and the LBS maps from Japan. The mobile data
based media industry was invented only two years earlier, in 1998 when the
first downloadable paid content for mobile was introduced. That was the ringing
tone in Finland by Saunalahti (later Jippii, now part of Elisa). By year 2009
(12 years from launch), basic ringing tones were worth 5 Billion dollars
according to Juniper Research. For context, the very basic ringing tones
outsold global iTunes music by approximiately 2 to 1 that year.

Now lets look at location-based services. LBS based advertising was launched in
year 2000. By 2012 total global LBS advertising services were worth 685 million
dollars worldwide (ie 526 million Euros according to Berg Insight). So over a
similar 12 year period, one service became 5 Billion dollars in value, the
other only under 700 million in value. Basic, monophonic 'ploink-ploink'
ringing tones managed to grow 7 times bigger than location-based
advertisements.

So, lets be clear. Location-based advertising CAN grow. It HAS grown. But the
average growth rate of non-messaging based mobile data (mobile media) is about
50% at an annual growth rate for the past five years. LBS is growing at perhaps
10% or 20% per year. It is THE worst-performing sector in all of mobile. If you
do ringback tones. If you do MMS. If you do social networking. If you do music
downloads. If you do coupons. If you do alerts. If you do augmented reality.
Anything else in mobile grows more strongly than location-based services.

RISING TIDE RAISES ALL BOATS

Mobile has set the world record for fastest-ever growth from zero income to 1
Trillion dollars in annual value, achieved in only 29 years from the first
commercial cellular mobile (car-phone) call in Tokyo Japan on NTT's network in
1979 (four years before the more famous Motorola phone was sold in Chicago by
Ameritech). And 29 years later, the mobile industry breached 1 Trillion dollars
in annual revenues (currently 1.4 Trillion). Note first, that many big
industries we know well, like music, movies, gaming, radio, television,
computers and the internet - have never grown this big. So yeah, mobile is far
bigger than those industries. And that no Trillion-dollar sized industry has
achieved it this fast, in only 29 years. So mobile has set the record, and is
currently still, the strongest-growing giant industry on the planet.

Anything you do in mobile should grow. The point is, if you are not growing at
the rate of the industry, you are underperforming! And LBS is consistently,
chronically, dramatically underperforming. So yes, you can give me a stat of
growth or of revenues. It may seem impressive by itself. But immediately when
we compare it to any other forms of mobile data services, location-based
services are exposed as pathetically bad.

Take advertising. The first mobile ad was served in 2000. It was an ad running
on SMS text messaging, to fund the free headline news service on SMS (launched
in Finland by MTV3 the television broadcaster). How did SMS text messaging
based advertising do? eMarketer reported in 2009 that SMS text messaging based
mobile advertising was worth 6.4 Billion dollars. Yes, you can do ads with LBS,
in 12 years reaching a paltry 685 million, or you could do 9 times better in
one quarter less the time, using SMS advertising. You see what I mean. A rising
tide raises every boat. Even the worst, leaking, barely afloat boat will be
raised by a rising tide. But you should not aim for the worst part of this
industry, aim for strongest-growing parts.

LBS SPEED BUMP

So I think I have come up with a good analogy. LBS is like a speed bump in
road-construction. Most of the time if you build a highway (to allow cars to
drive fast from one town to another) you don't want speed bumps on it. Like
cars, with mobile, most users will want the speed, they don't want to be slowed
down. That doesn't mean there is 'no use' for speed bumps. We use speed bumps
for example to slow cars down near schools, or other ways to slow down traffic,
if for example there is road construction on our highway. In specialized cases,
like race cars, some racing circuits insert 'slow-down zones' in terms of
chicanes and hairpin turns, so that the race car drivers have more challenges,
more opportunities to make mistakes and for good drivers to be able to pass
lesser drivers, like they often do at Formula 1 race circuits, when the
organizers notice that the cars are getting too fast for that circuit.

Yes, we can find specialized uses of speed bumps, but in most cases, most
cases, they are a nuisance. Similarly LBS. If you give me a case example of any
mass-market success of LBS, the success can be attributed to some other aspect,
not the location. So LBS coupons? Yes. The gimmick here is coupon. You'll find
that mobile coupons of almost any variety are growing at break-neck speed. You
don't need 'location' to do successful coupons. Or the gamification of becoming
the Mayor of Starbucks, via FourSquare. This is a game. Games are huge growth -
just look at Angry Birds. Games are big, even location-based games can succeed
(but at lesser rates than most popular mobile games that do not use the speed
bumps of location). Or take Augmented Reality. Yes, plenty of AR is done with
location information, but its by no means the only way to do AR. The powerful
agent here is AR, not location.

PARCEL DELIVERY

So, lets take a perfect example. Parcel delivery. UPS has already launched the
service that smartphone users can re-direct their package deliveries to where
they are physically, at the time of delivery. So if you are not at home,
because you are stuck at the office working late, or there was an emergency and
you had to take one of your children to the hospital, etc, you can have the
parcel delivered to where you are, not the original delivery address that was
entered when the package was sent a few days ago. Brilliant, consumer-oriented
service. And I think I saw a TV ad of FedEx doing something similar when I was
in Toronto just now (only caught the end of the ad). This is a 'perfect' case
of LBS. Obviously, parcels are physical items, and are delivered to a physical
location. Isn't this a perfect location-based service?

No! No no no no no. Location is the speed bump again. Yes, its possible that I
am at the intended location when the 'querie' is made as to where to deliver
the parcel. Yes, its possible to use the GPS positioning on my smartphone to
tell UPS or FedEx please deliver the parcel 'here' (wherever that may be, my
home, my office, any other place). But its equally possible, that I am NOT
where I want the parcel delivered!!! The power of mobile is to go beyond
location! I could redirect that UPS package to where I am not now - I am now at
home, but heading to the hospital, so 30 minutes later, I'd prefer the parcel
delivered to the lobby at the hospital, not to my home. Or better yet, mobile
can transcend location. I could re-direct the parcel to my sister's house on
the same street, knowing she is at home. My smartphone cannot pinpoint my
sister's location based on my phone's GPS sensor. But I can easily give the
direction via an SMS or map, or simple mobile web address box, and type in my
sister's house number on the same street. Why would you want to limit your
'service' to an explicit location, when mobile goes beyond location, to
'movement'. I can be freed from location, with mobile. Location is an
artificial fence, an artificial jail for consumers. Mobile has the power to
free us from borders and limits and locations!

And again, this may seem radically 'new' and bizarre to you,
if you are relatively new to mobile, such as you discovered the mobile industry
only in the iPhone era (year 2007 or after that). We have known. J-Navi, the
location-based mapping and guidance service of J Phone in Japan (now Softbank)
reported in 2001 that 30% of their map request by mobile phone users came for
map information about some other location than where the phone was physically
at !!! Guys, I am not inventing some new radical thought here! We've known this
for more than a decade (those of us who bother to study this industry, not just
spew some baseless drivel)

USE THE 9 UNIQUE ABILITIES

This is so frustrating to me. I know exactly where it comes from. It comes from
the technology-geeks who look at the GPS sensor, see the personal location on a
map, here is where I am. And next they think, hey, I could serve coupons and
offers to the person near the store. This is so stupid. Mobile has 9 unique
abilities that offer us the chance to deliver magical experiences, something
never before possible on any tech including laptops and the legacy internet.
Location is not one of the 9 unique abilities of mobile. Location existed in
the third mass media - cinema. We can do location-based ads shown at the cinema
'after the movie if you want to have a nice dinner, come to Tony's Italian
Restaurant two blocks from this cinema'. - these kinds of ads used to be very
common back in the earlier days of movie advertising. And how supremely
successful are they? Yeah. As trivial to cinema advertising as any LBS ad
examples are to the overall mobile ad market. If Location-based ads were so hot
and successful, we'd today see massive LBS ad market powering cinema and
dwarfing television ads.

3 - Mobile is permanently connected
(these two are not the same, you can permanently carry a device that is not always
connected - your wristwatch for example, and you can have a permanently
connected device that is not always carried - like your home broadband internet
connection)
4 - Mobile has a built-in payment system (note this includes both making
payments and mobile can be a terminal for receiving payments)

5 - Mobile measures the audience most accurately

6 - Mobile is available at the point of inspiration

7 - Mobile captures the social context of consumption (ie
our viral forwarding, our likes and follows, recommendations, which does not
require purchase - I can recommend something even if I didn't buy it)

8 - Mobile enables Augmented Reality

9 - Mobile offers a digital interface to the real world

These nine abilities are the way to build successful mobile services. Location
is not one of the unique abilities. Location is not even a 'useful' addition
for most services. In many cases where location is used, the service could be
better if location was abandoned, and in most cases where location is
collected, the service would not suffer in any meaningful or measurable way, if
location-collection was abandoned.

NICHE ONLY

Yes, there are niche uses where location is very important. The Blackberry
Pocket Cop app, for example, allowing policemen to use Blackberries at work. It
has all kinds of secure police uses including obviously secret messaging if the
policeman is in a dangerous situation and cannot talk but needs to communicate.
But yes, it also has the location-positioning of the police officer. This is
very important if the police officer needs help, because he will not
necessarily know the exact name of the street or cross-street or street number
etc. But a location pin-pointing of his position can truly be life-saving
feature, in a highly dangerous city like say Baltimore (one of the first where
Pocket Cop was launched).

If you find yourself lost, then location-based accurate positioning is very
useful. Yes, if you are driving your car in unfamiliar places, and find
yourself lost - yes, an accurate positioning of your map is very useful. So
specialized drivers - taxi drivers for example, who always drive to different
places - will benefit from LBS based guidance on their car navigation systems.
What about you and me? Did your office secretly shift to a new address last
night? Did your children's school suddenly escape to another town? Did your
home re-position to another suburb today while you were at work? No. Most of us
do not find ourselves in unfamiliar places daily, weekly or even monthly. Once
or twice per year we might go on vacation to an unfamiliar location. A few
times we might venture to a strange part of town to some visit etc. But unless
you are a jetsetting global James Bond, mostly we do not need the daily
guidance in strange cities every day.

And if you set up a treasure-hunt type of game, like the
rapper Jay Z's autobiography (released as a traditional printed book) where
there were clues on every page for 300 treasure-hunt type of missions for fans
to discover out of New York City, then yes. Locatino can make a difference. But
thats about it.

SO LO NONSENSE

So we get SoLoMo, Social is great. Mobile is treat. But Location is sheer
rubbish idea. If location was so powerful as a driver of commerce for example,
why would retail worry about mobile. Traditional bricks-and-mortar stores are
ultimately location-based. They say its all about 'location, location,
location' in retail. Why would they worry about shoppers with mobile? Because
mobile releases us from the binds of location! Because mobile frees us from
location. Because mobile liberates us from the chains of location. Imagine
being superman, able to fly, and then being chained to the earth. Thats what
you get, if you force location to something that is mobile. You shackle it down
like a prisoner.

Location only limits your business opportunity, it does not expand it. Take
your location-based promotions. Say you are a florist and find yourself with
sudden overstock of inventory of flowers. Flowers that don't last long. Someone
had a wedding, but cancelled. You now have tons of flowers to sell. So you
could blast the neighborhood with flower offers, get 12 roses for the price of
6, that kind of thing. And if you did use location-based ads, for example
blasted to all within walking distance, no doubt you'll get some business out
of it.

Here's the point. If you did the same ad - without the location-limitation -
you'd get more sales. So why only limit sales to those who happen to be near
you (but are not necessarily needing flowers). You annoy lots of people, to get
some business. But why not rather have opt-in database for clients who shop
with you? Now you can send the offer to all who already like your store, who
have shopped with you before - and some happy Romeo can take his car, drive to
your store, from quite far away, to buy say two dozen roses for the price of
one dozen, to surprise his Juliet.

Location limits your reach. So its not just those within driving distance to
your store. What about the James Bondian world traveller. He who has a nice
secretary, his 'Moneypenny' back at the office. If he gets the alert while on a
business trip to Germany, he could buy a bunch of roses, pay by credit card,
and have them delivered as a spontaneous gift to the hard-working secretary
back at the office. Location only limits your opportunity. Its like a speed
bump on the highway. For most mobile services, location reduces your
opportunity.

ORCA VS NARWHAL

I wrote at length about how the Romney vs Obama campaigns used data-mining.
Romney did it the old-fashioned way, by zip codes, voting districts. His method
was akin to location-based marketing. This voting district has a high
proportion of Republican supporters, lets direct 'get-out-the-vote' type of
activities like phone calls and reminders to that area.

Then there was Obama's campaign which yes, did of course know what district you
were in, but its targeting was based not on location, but rather, on two scores
of actual human behavior - the voter's preference ie supporter of Obama or
supporter of Romney (individual voters identified and targeted this way) and
get this - also each voter's likelihood to vote. So if you are a strong
supporter of Obama (and have not voted yet on election day), you won't need the
encouragement to vote. If you are very likely to vote that day (but have not
yet voted) its no cause for concern at Obama headquarters, because they know
you will (and any get-out-the-vote efforts would be wasted, because you would
vote for Obama anyway). But the targets were the lukewarm supporters of Obama
who were not sure if they would vote that day. Those types of voters would get
calls and SMS reminders, even other Obama supporters would call them directly
(as volunteers) with a nurse calling a nurse, a teacher calling a teacher, a
military vet calling a military vet etc. This is the far FAR more powerful way
to use (mobile) technology to achieve your ends.

Yes, Romney's campaign with location, could do something that was better than
nothing. But what Obama did, with targeting, actual voter insights, and focused
efforts (all to an opt-in database where voters had given permission to send
messages from the campaign etc) gave Obama at least 3.5 million more votes than
what he would have gotten if Team Obama had used traditional zip code/postal code/voting
district type of - location-based - voter activation methods.

COUNTER-PRODUCTIVE

Mobile allows our service to be freed from tethering. Freed from the cable.
Freed from the socket. Freed from proximity. Freed from short-range wireless
even. Freed totally from location. Location-positioning is the very antithesis
of what mobile can do. Its like building an airplane, then cutting off its
wings. I am reminded of Gary Schwartz's excellent observation in his new book
about use of mobile tech in retail: Fast Shopper, Slow Store. Gary explains why
tablets are only ultra-portable digital devices, not as powerful as mobile
phones and smartphones. Because mobile phones and smartphones can be operated
single-handedly,.while doing other tasks. Tablets, on the other hand, in Gary's
words 'immobilize consumers'. The tablet is very portable yes. But the moment
you pull it out of your bag, and start to use the tablet, it will immobilize
you. You want to be seated, you need to use both hands. Its very difficult to
use a tablet while walking, and almost impossible to use it single handed. Most
of the time with tablets, once we start to use them, we stop. We stop moving.
We become immobilized. A tablet to mobility is like Kryptonite to Superman. The
superpowers were there, but are now gone.

So, when you see millions (and even Billions) headed to some new start-ups and
ventures that seek to revolutionize mobile through location, be warned. Tomi
told you so, Tomi said years ago, that is not going to be big business. Be very
careful and monitor the space.

If you see forecasts of huge growth projected for location, don't fall for the
same trick! We had the exact same forecasts years and years ago. It never came.
Don't be fooled by some clueless analyst promising a massive future. Look at
his starting point data. What does the analyst say location is worth today. How
many users today. How much revenue today. It is pitifully little. Then wait and
see. If I am wrong, and suddenly after more than a decade of failure, location
somehow does break free, then we must see real user and revenue numbers that
are big. Revenues in the many Billions. Else, be smart. If the numbers are not
there, learn the lesson, and put your money, your time, your project resources
into any other part of mobile, where it will give you better returns than it
would in location.

And please please please do not write that 'now' is somehow different. No, GPS
on iPhones today in America is no different from GPS on early KDDI phones in
Japan in 2002. Yes, Japan had GPS based location services a decade ago. Don't
say maps make a difference or 3D rendering of cities. Japan had all that by the
middle of the last decade, yet KDDI itself - who essentially invented and
launched almost all modern LBS concepts from LBS-based ads to LBS-based
treasure hunts to LBS-based maps - say that of their whole service portfolio,
LBS is the worst-performing part.

Context is good. Context is useful. Context can include elements like time, and
the users 'status' of being at work or at home. Context can have dozens of
elements that can help us identify and target services to help our consumers.
And within the area of Context, location can be used as one element (distinct
from say, proximity). Location can be used as an input to derive other benefits
such as movement. We can measure speeds of traffic based on the measured
positions of individual phones on a highway, and measured over a few minutes of
time. Across many phones (as those inside cars moving on that road) we can
calculate very accurately the average speeds sustained on that road, to
determine for example if there is road congestion this morning, etc.
Context-based services I can see becoming big over time. And location may be
one of dozens of inputs. But don't plan on launching location-based services
for the masses. They never turn out big.

May 20, 2013

So yeah, I had the honor of speaking twice at this year's MMA Forum event in New York City. And as the conference hotel was the Marriott Marquis, right on Broadway, I can say that I've 'done Broadway' haha...

But apart from my presentations - you may enjoy 'Around the World in 80 Slides' about the status of mobile marketing outside of the USA (the slideshare presentation has had over 6,000 views, wow, in just over one week!). Lets talk about what else happened at the MMA Forum. Here is my update of the latest thinking from many of the best marketing and advertising minds of Madison Avenue, and how they now see mAd as in Mobile Advertising, and the more broad term, Mobile Marketing, in the context of other modern marketing tools and methods. The mAd industry is maturing nicely. I was very VERY impressed with what all is being discovered, discussed and disseminated.

This blog is a collection of my notes from the MMA Forum. As the event ran mostly on three threads, I could not obviously attend all presentations, so please take this not as a comprehensive review but rather a sampling of what we learned. And in no particular order, lets see what brands were saying what about mobile.

MACY'S DEPARTMENT STORE

Jennifer Kasper, the VP of Digital at Macy's, yes the world's largest department store, gave a keynote to the MMA Forum. She said that if Disney can turn from an entertainment company into a retailer, why can't Macy's turn from a retailer into an entertainment company. And she pointed out that in New York City, the Macy's Thanksgiving Parade is truly an institution, one that is covered nationally on TV. Jennifer made a wonderful observation about mobile phones in the stores: before we consumers were being yelled at for using our phones in the stores, now we are being encouraged to use them. And as to mobile marketing, how about this innovation - we all know that TV shows can be interactive via SMS, like American Idol and Eurovision etc, what about TV ads? Macy's has introduced TV ads that invite TV viewers to respond live, and even make purchases straight off the live TV advertisement.

ANNHEUSER-BUSCH INBEV

We had the privilege of hearing Winston Wang give a keynote too. And boy, was that packed with all the right things to say, and just about everything you ever wanted to know about mobile when used in marketing. Winston was like a rapid-fire quote machine. My notes about his keynote ran 20 separate items and honestly, I could write a long blog just about what all he said, and the insights his comments reveal and contain. Also, as already wrote on Twitter when Winston was speaking, I could use a Winston Wang beer quotation at the end of just about every slide I show about mobile marketing, haha, they were all totally the right message and totally up-to-date and so comprehensive they truly covered the whole moblie marketing spectrum. But let me try to summarize it to a few of the best lines and examples.

To start with, a lovely beer quote: Physical social is beer, digital social is mobile; innovation opportunity lies in the middle. Winston also said everyone's attention is going to mobile. Mobile will connect marketing and sales. Mobile is measurable like nothing else before. Mobile amplifies events. Mobile is not just B2C, its C2C (Tomi comment: Cool !!! truly in the spirit of Communities Dominate Brands the book and the origins of this blog). And get this, Winston ended his presentation advising the audience to use 'Tomi Ahonen's 9 unique aspects of mobile' to create winning mobile concepts. Thanks Winston! The beers are on me!

But I'm not done with Winston Wang. Those were selected pearls of his many quotes. What is Annheuser-Busch Inbev, the world's largest beer brewery doing in mobile? Well, as Winston is their Director of Innovation, you can guess its plenty, across all their brands. Like Stella Artois, which has an advergame about pouring the beer correctly (using the sensors of the smartphone). This game is also a virtual tutor/mentor to train the proper speed to pour Stella Artois (which is obviously VERY slow and STEADY to ge the right head on the beer). They have an AR app to find the nearest bars and pubs that serve Stella Artois.

Or how about the Bud Light Sports Fan beer app. It is designed for second screen use (ie simultaneously while watching a live sports game on the TV ie first screen, you pull up the Bud Light Sports Fan on your smartphone or tablet for your second screen experience as you watch the live game). The app poses relevant questions about the live game for fans to react to, giving away prizes for the best answer or best guess. Some questions ask for predictions of game results and game events for that live game. Other questions are trivia about that sport and the teams involved etc. Very engaging.

HOME DEPOT

Yet another brilliant presentation was by Trish Mueller the Chief Marketing Officer of Home Depot, the world's largest tool (and garden furniture) retailer. She gave tons of examples and said that whereas a real bricks-and-mortar superstore of Home Depot can only stock 35,000 items to sell, the mobile phone has an 'endless aisle' and they currently stock 400,000 items for sale on the phone screen. Home Depot has found that more searches already come from mobile phones than traditional PC based internet.

The Home Depot shopping app has several brlliant ideas, including an on-screen measurement tool for measuring bolt sizes, to an Augmented Reality furniture virtual tester, using the cameraphone to place garden furniture into your yard or balcony, to see how it looks and fits. Their app includes the 'talk to the hand' option where shoppers can talk directly to Home Depot advisors rather than sending questions. The Home Depot app has been downloaded 3.5 million times

UPS

UPS the package delivery company has deployed a solution to let consumers decide where the final delivery of the package will take place. They want to deliver only once, to the best address. So if you will be home, thats fine. If you prefer the package delivered to your office, thats fine. If you're at the hospital today because your child is suddenly ill, have the package delivered to the hospital reception, etc... It saves UPS tons of money from not having to make unncessary delivery attempts.

STATS STATS STATS

And we heard a ton of new stats. Many were familiar to my readers and/or nicely quoted my stats, from the 'more mobile phones than toothbrushes' to the 150 times per day stat. But here were new stats for us to now quote in our presentations and articles about mobile marketing:

Time Inc: People check news on their phones 40x per day

MMA: 91% of mobile phone users have their phones 24 hours a day, 7 days a week (ie also sleep with the phones)

The Weather Channel: most mobile users of their service spend more than 1 hour per week on weather news

AT&T: 88% of US consumers watch the 2nd screen (mobile) while watching TV

MMA: 43% of Americans use mobile as their primary search tool

Nielsen: USA has 89 million mobile shoppers

Rovio: Angry Birds has passed 1.7 Billion cumulative downloads

Millenial Media: There are now more mobile phone connections than humans alive

Mondelez: Mobile increases impulse buys inside shops by 18%

MMA: 49% of US consumers have changed their purchase decision inside a store because of mobile

Google: 8 in 10 smartphone shoppers use their phone in the store to help them shop

3Seventy - Brands see a 25 dollar return for every 1 dollar spent on SMS

MMA: Mobile coupons get 10x better redemption rates than eCoupons

MORE MOBILE FIRST COMPANIES

We heard several more companies embracing 'Mobile first' for their digital strategy (ie design for the small screen first, before designing for the old-fashioned PC based legacy internet). Home Depot said they are a mobile first company. JP Morgan Chase bank said you have to have a mobile first strategy. Starbucks says nothing is more important than mobile. Rovio said Angry Birds would not have been possible had Rovio not been a mobile first company. (and its nice to see my thinking from my 2002 book m-Profits now embraced so widely by such a diverse range of giant companies, as the right way forward..)

QUOTES

There were so many good quotes that came from the event. Here is a sampling of my faves:

Geo-fencing is so 2012 - Saatchi's Media Director, Gabriel Chang

Phones have taken the place of the cigarette break - Google Head of Mobile and Social Tim Reis

Mobile is augmented humanity - Google Head of Mobile and Social Tim Reis

Shoppers who use mobile more, buy more - Google Head of Mobile and Social Tim Reis

This event heard the mantra that the best way to reach your whole audience is SMS text messaging. We had continuously SMS examples and stats (most very familiar to those who follow my writings) but this was very refreshing to me, as in the past there was plenty of the misguided view that one should do a smartphone app for example, rather than use SMS. Now it was a near-unanimous view by all speakers that anyone in the audience had to do SMS first.

And many then also mentioned that the next thing to do after SMS, was MMS. Like Gary Schwartz the author said at the event, if you include purchase uption to a marketing SMS, your response rates shoot up 3-fold. But if you use MMS and include purchase option, compared to basic SMS informational/advertising/branding messages, MMS will get you a 6-fold increase in response rates. Like I say, MMS is the ultimate wet dream for anyone in marketing and advertising, its everything you ever wanted SMS to be, if you are in advertising, marketing or media. No, MMS is not the perfect picture-sharing method for consumer-to-consumer communications (although we can use it for that as well). But MMS is indeed the ultimate brand messaging tool for their marketing communications, and increasingly the MMA Forum speakers held this view too. Very nice to hear.

PIZZA BUTTON

Finally a truly brilliant idea from Dubai. Red Tomato Pizza has deployed a very simple fridge magnet, that includes a GSM chip and data connection to their pizza ordering system. Your fridge magnet looks like a pizza slice, and lets you configure your pizza exactly as you like it, pepperoni or tutti-di-mare or vegetable or extra cheese etc, and when you're ready? Just press the button. Your pizza is delivered in 30 minutes to your door. Just press the button. Gotta love it!

Thats my quick view to the best MMA event yet. If you see an MMA event near your neighborhood, come there and meet the industry leaders and learn about the best ideas in this, the most creative dimension of the best age of innovation, with the most powerful digital platform ever deployed: mobile. And if you want to see my Around the World in 80 Slides survey of mobile marketing outside of the USA, check out my slides of my MMA Forum presentation via Slideshare.

April 10, 2013

There is an alternate fantasy world, that Nokia CEO Stephen Elop and Microsoft CEO Steve Ballmer push to unsuspecting reporters. It is bolstered by fabricated numbers, bizarre anomalies and continuously unsubstantiated claims of big surges and market recoveries 'just around the corner'.

...And then there is reality.

The strongest reality of how Microsoft's Windows Phone OS, including WP8, and the related Nokia Lumia series of smartphones can do in the future - is consumer 'intent to buy' surveys reflecting both loyalty and interest. Here the story is brutal and consistent. We heard from intent-to-buy surveys in Europe in late 2011 that Lumia was not going to sell more than 2% in early European launches - almost exactly what it ended up doing. Then we heard from Chinese surveys of intent-to-buy that Nokia share was collapsing in 2011 and it did. And so forth. That was early. What about after the consumers got to play with the Lumia and new Windows Phone 7.5? Then we had the Yankee Group survey of Lumia owners in the USA, and the Bernstein survey of US and UK smartphone owners. Again. Brutal. Four out of ten Lumia owners rated it the worst phone possible. Two out of three Windows Phone current owners will never buy another again! This is absolute concrete evidence that this Microsoft-based system cannot thrive. If actual independent surveys of consumer opinions who own the devices are this dismal.

And on those 'but they get the best ratings on Amazon' bullshit peddled by Microsoft and Nokia defenders. Haha, no. We KNOW now how that was done, it was the Dirty Tricks department of Microsoft, now also used by Nokia, and their trolls, who rushed to spam all review sites with masses of unsubstantiated glowing reviews by supposed new owners - at ridiculous review rates at the launch of new phones - and by reviewers with no history of other reviews. They were plants, they were paid for, they were Microsoft smoke-and-mirrors squad who were behind those fake news. No, the independent reviews of actual Windows Phone users overall, and of actual Lumia users at the Nokia side - have been consistently horrid. Consumers hate the smartphone at unprecedented levels. Yes, there is the occasional customer who loves it, but most hate it, which is why retail sales pricing collapses weeks after new launches, and why resale values of Lumia series are in the toilet, and Nokia Lumia return rates are the highest recorded in Nokia history.

The Windows propaganda machine says 'but the newest release will fix all that'. We've heard it time and again. So once again, Nokia Lumia first edition, on Windows Phone 7.5 (and its dead-end migration path to WP 7.8) was a failure, yes. But this will 'all be forgotten' and 'all will be well' on Windows Phone 8, that just launched. Look at all the glowing reviews and how great it is. Fool me once, shame on you. Fool me twice, shame on me. We've heard this story so many times, we have to have learned by now. So, Tomi, do you have 'proof' that Windows Phone - version 8 - is a market failure then?

LATEST MKM CONSUMER SURVEY

Yes we do. MKM has JUST released a consumer survey that discusses very specifically Windows Phone version 8. The survey was part of their consumer survey of mobile phone brands in the USA, covering 1,500 US consumers (and before you bitch about the number - that is a large consumer survey, statistically relevant, usually consumer surveys of more than 1,000 respondents is considered very reliable - if you don't know why, go take a basics 101 course in marketing research and statistics).

MKM found that US consumers love their iPhones and Androids, and intend to buy more Samsungs, Apples - predictable stuff. But lets drill down and see what MKM found out about Windows Phone and Nokia. Remember the movie Glengarry Glenn Ross? The one with Al Pacino as the ace salesman who sells worthless land in Florida, the movie with Jack Lemmon, Alan Arkin and Ed Harris among the other sales guys, and Alec Baldwin delivers one of the most memorable monologues in cinema history - "You see this watch? this watch costs more than your car." and "This month's sales contest first prize is a Cadillac. Wanna see second prize? A set of stake knives. Third prize is you're fired." (there were four salesguys so two would be fired by the end of the month) And the classic "ABC, Always Be Closing. Always. Be closing..." (perhaps the greatest movie about sales ever, written by Mamet)

Anyway, Alec Baldwin discusses the two golden rules of sales, ABC and AIDA. ABC we saw, AIDA is Attention, Interest, Decision and Action. As Alec says "Attention. Do I have your attention, I know I do, because its fuck or walk. You close or you hit the bricks." (translation: you sell or you are fired). And so forth, I love that movie. Anyway, do American consumers pay attention to Windows Phone and Nokia? The survey said that 6.4% of smartphone owners ie 3.2% of all respondents had a Windows based smartphone, and 1.6% of all phone owners (3.2% of smartphone owners) had a Nokia branded handset. You would therefore expect that the awareness of Nokia's newest version of its OS would be known at something like those levels, and same is true overall of Microsoft and Windows. Attention. Do I have your intention? The survey found that 19% of respondents (ie 38% of smartphone owners) knew that Nokia has its new OS now as Windows Phone version 8.

Bearing in mind that half of respondents do not own smartphones, and of those who do, the loyalty with iPhone and Android is very strong, this 19% of all US consumers, 38% of smartphone owners is a VERY strong number for Attention. It is incredibly strong, considering how poorly Nokia is used by US phone owners - only 1.6% of all respondents actually own a Nokia phone. Attention? Do I have your attention? Yes, Nokia launched Lumia - as CEO Elop promised - with the world's largest phone launch budget of all time, by a wide margin - over 3 times more money thrown at Lumia than the previous biggest launch ever. And that was then added to, by Microsoft's biggest-ever marketing support of its smartphone marketing, and that, added to by the carriers often doing their biggest launches ever. In the USA specifically, AT&T said its Lumia launch support was also its biggest phone marketing push of all time.

So 1.7% of US consumers own a Nokia phone, and only 3.2% of US consumers had any Windows Phone branded smartphone by any manufacturer, but a massive 19% know now - only months from launch - that Nokia has Windows Phone 8 available. This is what over-saturated marketing can achieve. There is nothing more to give. Marketing has done its job. Those who don't know either are utterly not in the smartphone market at all, or are already fully committed to some other brand and fiercely loyal to it (think iPhone owners standing in line overnight for their next iToy).

Understand what this means. It means, that no matter how many more Billions of money is thrown after Lumia marketing now, the attention of any conceivable addressable market has already been reached. There is nothing more that can be done by more 'marketing'. So lets move to Glengarry Glen Ross and Alec Baldwin's part 2 in AIDA. After Attention: Interest. Are you interested? And we have MKM asking that explicit question about Windows Phone. While only 3.2% currently have Windows Phone on their smartphone, but 36% said yes, they ware interested in Windows Phone. Again, the over-saturation of marketing and media has done its job.

Now, one in three Americans are intersted in Windows Phone devices, one in five Americans knows Nokia's Lumia series runs the latest Windows Phone 8 software. Currently 3.2% of Americans have any Windows Phone and 1.6% have a Nokia branded phone. How well is this interest and attention being tranlsated into sales. Third in the AIDA formula is Decision. As Alec Baldwin asks the salesmen being threatened to be fired - have your made your decision, for Christ? (meaning to go out and sell tonight, to try to keep their jobs). The numbers are low, this huge level of interest and attention, the future purchase intention HAS to be better. They know about Windows Phone 8, they have experience with past Windows, they HAVE to want the newer better system? Right?

Wrong.

MKM survey of what phone US consumers intend to buy next, finds that while 1.6% own a Nokia, 19% know Nokia has Windows Phone 8 now available, only 0.7% are willing to buy one. Yes. That is right. Less than one percent of US consumers have found the propaganda-brainwashing machine by Microsoft, AT&T and Nokia to be compelling enough, that they would be willing to actually buy a Lumia running Windows Phone 8.

ZERO POINT SEVEN PERCENT

Yes, 0.7% only. So lets start with Nokia US loyalty. Windows Phone was supposed to resurrect Nokia in the USA. This idiotic idea was pushed by Elop, when he abandoned the far bigger and faster-growing Chinese market - where Nokia held over 60% market share in smartphones and the highest loyalty of all smartphones - to pursue the far smaller US market where both Nokia and Microsoft were weak players at the time. Today China's market for Nokia has collapsed, is under 5%. Nokia before this silly Eloppian micromadness held 4% of the US market, it is now yes, 2%. After a year of selling Lumia, Nokia is still selling LESS in North America than it did before this idiotic plan was hatched by the Twin Evil Stevies and their microbrains.

But will Windows Phone 8 save Nokia and Microsoft now? No. Of EXISTING Nokia smartphone owners, those last suffering and most loyal fanatics that are left, when they see Windows Phone 8, they are running away at the rate of 55%. Yes more than HALF of all who still own a Nokia smartphone, after seeing Windows Phone 8, and based on their current Nokia (mostly Lumia but also some Symbian) experiences, looking at Windows Phone 8 - 55% of current Nokia smartphone owners say - never again.

THIS IS FAILURE

What part of No can you not understand, Nokia? What part of No, can you not understand, Microsoft? Oh, wanna see misery? Microsoft Windows home market is the USA. MKM asked US consumers are you interested in Windows on your smarpthone - this is Microsoft's home - and 64% said No! This is, and I quote Alec Baldwin from Glengarry Glen Ross, so I apologize for the foul language, but this is so clearly the point: "You can't close the leads you're given, you
can't close shit, you are shit, hit the bricks pal and beat it 'cause you are
going out."

All Americans know Microsoft and Windows. Two thirds of Americans have such a poisoned view out of personal experience with the Evil Empire, two thirds of Americans say to Microsoft, stay away from my phones! This is such enormous hostility that Windows can never become the third ecosystem, if your best market hates you this passionately. But yes, lets move on to the cruncher.

96% WHO UNDERSTAND IT, HATE IT

This is the key finding for anyone in any way interested in Microsoft, Windows, Windows Phone, Windows smarpthones, Nokia, Lumia, Nokia smartphones and the Nokia-Microsoft 'partnership'. 19% of Americans are not just interested in Windows Phone, but know that Nokia's latest Lumia series has Windows Phone 8 on it - yet only 0.7% are willing to buy one. It means, of those who know of this actual Nokia-Microsoft offering, 96% of US consumers who truly do understand it and know it - reject it! This percentage is now lower even than the horrid Symbian-to-Windows consumer loss that I reported here from previous consumer surveys last year. You remember this graph?

This graphic may be freely shared (note, this graphic is on previous consumer surveys, does not include this, even worse MKM survey now reported)

Yes, based on PREVIOUS stats, Nokia lost 93% of its loyal customers attempting the transition. Now, the future with Windows Phone 8 says that 96% reject Nokia. This is NOT a company that is 'improving' - this is a company going in the wrong direction, the customers are still abandoning the proposition.

When Bill Gates was in charge of Microsoft, the Windows smartphone market share was second best in the world (behind Nokia's Symbian obviously) and reached a peak of 12% market share about five years ago.. With Steve Ballmer in charge, bullying the ecosystem and scaring Microsoft carrier-partners, Windows smartphone market share had fallen to 5% by 2010. That is when Ballmer convinced his Nokia-pal and ex employee Stephen Elop to abandon the world's largest smartphone OS - when Nokia had GROWN smartphone sales in year 2010 by 52% in just that year, and grown more than Apple or RIM or Samsung - yes its true please check the numbers, Nokia grew more in 2010 than famed Apple, Samsung or RIM - and Nokia did this with Symbian, and did it highly profitably, with the smartphone unit profits increasing towards the end of the year, not diminishing. Nokia towered so far bigger than its nearest rivals, more than twice as big as number two - that Toyota, General Motors have never had such market lead in cars, IBM, HP or Dell (or Apple) have never had such dominance in PCs, etc. This all Elop threw away, to hop in bed with Ballmer and the Microsoftian Misadventure. What happened?

We heard the story. Sony said there is no demand by carriers for Windows Phone and abandoned the platform to focus on Android where all the demand is. Dell said there is no demand for Windows Phone and actually quit smartphones altogether. Motorola said there is no demand for Windows Phone and quit the platform only doing Android. Now again, we heard this February from LG that there is no demand for Windows Phone, and they are not bothering to launch Windows Phone smartphones doing Android instead. Samsung said the same, they now are launching Tizen for which there is big demand by carriers, and continuing with Android, but not doing Windows for there is no demand.

So yes. What happened? Major analyst companies like Gartner, IDC, MIC, Strategy Analytics promised us Windows Phone would have magically recovered to 15% or so by 2012, and clueless Pyramid talked of 25% or better market share for Windows supposedly passing even the iPhone by now. We know the story. Before this Nokia partnership, Nokia had 34% market share and Microsoft had 5% in 2010. In 2011, a year when Nokia mostly sold its suddenly 'Osborned' Symbian phones, its market share collapsed at a world-record speed falling to 16%. Yes, this was literally the worst collapse in handset history, including famed market collapses of the past such as Motorola, Palm and Siemens. How did Microsoft do as it waited for the first Nokia Lumia phones to be launched? Windows smartphone market share fell to 2% in 2011.

Ok, that was 'to be expected' as we awaited the saviour-phones, the superphones, the Lumias running the promised super OS by Microsoft, the brand new awesome Windows Phone 7.5 that Microsoft finally launched in late 2011. How did this partnership do in 2012? Nokia took its world-record-setting collapse of 2011, and managed to out-do it, by an even worse year, setting the newest worst-ever year in handset market collapse, falling from 16% market share to 5%. Yes. Stephen Elop created the world-record collapse of a market leader (by the way, this is not just in phones, it is actually the world record for ANY industry, cars, airplanes, TV sets, PCs, soft drinks, whatever industry you want, THE world record collapse in one year, actually) - and he then managed to follow up with an even worse world-record once again. And is there a silver lining to this? Did this 'sacrifice' and massacre of Nokia's market share result in corresponding gains to Windows? What was Microsoft's Windows smartphone market share last year? 2%

TWO PERCENT !!!

Before this partnership was announced, their separate market shares totalled 39% (34% Nokia, 5% Microsoft). Now after the Nokia Symbian migration is essentially complete, as we heard from Nokia at the last Quarterly results - what was this partnership's combined market share for year 2012? 5.4% (Nokia 5% and Microsoft 2% but 80% of the Microsoft sales were by Nokia). Microsoft before being poisoned by Nokia, had 5% market share, it now in 2012 had 2%. Microsoft before Windows Phone on Lumia launched, had 2% market share in 2011, after Nokia joined in, Microsoft's market share in 2012 was unchanged at 2%. This is total comprehensive failure by Microsoft.

For Nokia it is worse. Before Microsoft Nokia towered over its rivals, grew 52% in one year in smartphones, made huge profits in smartphones and had the highest consumer loyalty in the biggest markets such as China where it commanded 60% market share!!!! By 2012 after all the bad-will of the Microsoft misadventure - remember even Americans hate Windows so much, two out of three hate the idea of Windows on a smarpthone - Nokia's market share went into the toilet and was 5% for the year - and get this - its down to 3% by Q4 of 2012, so it kept crashing even as Windows Phone 8 was being launched at the time.

This is total comprehensive failure of the Windows experiment. I could have told you so, in fact I did tell you so. I was the most accurate forecaster of Nokia (by a massive margin over the next-most-accurate forecaster) and I was the most accurate forecaster of Windows (again, by a massive margin over number 2) for this silly journey. And I have reported here faitfully all major consumer surveys of this platform. And they keep promising us, that the next Windows version will cure all the problems. Oh? Windows Phone 8 was supposed to finally fix all the problems and finally be the answer to all that was troubling this partnership. Well, now we know.

MKM survey of US consumers finds that two in five smartphone owners knows that Nokia Lumia has this new Windows Phone 8 as its system. Yet of all who know it, 96% say they will not buy Nokia Lumia with the new WP8. Even of those last remaining vestiges of loyal Nokia owners, their experiences with Windows Phone have been so bad, that 55% of current Nokia smartphone owners in America refuse to buy another Lumia again, even as they have seen Windows Phone 8. Windows Phone 8 will not save Nokia. No, this platform is dead.

ACTING IN NOKIA'S BEST INTEREST

So, Nokia? All other Windows smartphone manufacturers have said that there is no demand for Windows Phone, or the demand is so weak, they don't bother to release new Windows Phone products. Even Nokia's CEO Stephen Elop has said that many carriers hate Lumia not because its a bad phone, but because they hate it that Microsoft owns Skype, that there is a reseller boycott that is against all Windows Phone manufacturers. Elop explained this at the Annual Shareholder's Meeting for Nokia last year. And departed Nokia Lumia execs have said so, and departed Microsoft Windows Phone execs have said so, that there is no demand - or that there is actually an active carrier/reseller boycott even, against Nokia and against Windows Phone. Elop has complained bitterly many times, that Lumia does not get resale support, that the phones are in the stores but the sales staff are not selling them (and remember, the Lumia series has a Nokia-record rejection rate/return rate and thus the sales staff obviously hate selling it). This retail 'reluctance' (if you don't like my word 'boycott') against Nokia has been verified in countless checks in countries from USA to UK, from Finland to France, from Canada to China. Again, its not that silly Tomi Ahonen has invented this problem - Nokia's CEO Stephen Elop has said countless times that the problem is at the carries and retail sales.

The REASON why Nokia's sterling credit rating when Elop took over - yes, Nokia was rated by S&P, by Moody's and by Fitch all as one notch below PERFECT, this at the time of global economic crisis when most Nokia rivals were reporting losses - the reason why those credit ratings downgraded Nokia, was not because the Lumia or Windows phones were bad, it was because there was no carrier support, the retail support was lacking. The ratings agencies listed this problem as the reason at EVERY downgrade, often as their only reason or the biggest reason. And you know the story, Nokia was downgraded so many times, today all three ratings agencies list Nokia as junk!!! Not because Windows Phone or Lumia are bad phones, its because the retail and carriers refuse to sell it.

So your retail refuses to sell your product. The consumers who have tried your new product hate it, refuse to buy more, and are returning it at record levels. The newest version is rejected by 96% of those who see it. What part of No do you not understand, Nokia?

Samsung is the world's largest smartphone maker. They also sell Windows Phone based smartphones. They are not foolish to make the world's most undesirable smartphone their only platform. They of course sell on Android and bada and are about to launch on Tizen. Huawei is the world's third largest smartphone maker. They also sell Windows Phone based smartphones. They are not foolish enoguh to make the world's most undesirable smartphone their only platform. Huawei sells most of its smarpthones on Androi and will launch smarpthones on Firefox and on Tizen. ZTE is the world's fourth largest smartphone maker. They also sell on Windows Phone. They are not foolish enough to make the world's most undesirable smartphone OS their only platform. ZTE sell on Android and will launch on Firefox too. Lenovo is the world's fifth largest smartphone maker. They do not bother with the world's most undesirable smartphone platform, they only do Android. Sony is the world's sixth largest smartphone maker, they used to sell Windows based smartphones too, but after they noticed its the most undesirable platform out there, Sony quit it and now only sell on Android. LG is the world's seventh largest smartphone maker. They also are part of the Windows partnership but found that there is no demand for Windows so they only do Android and will also expand to offer Firefox based smartphones. LG recently bought Palm WebOS as another more viable OS than Windows. HTC is the world's eighth-largest smartphone maker, and the launch partner for Microsoft's smartphones a decade ago. HTC has noticed the demand for Windows based smartphones is weak and thus has shifted most of its production away from Windows to Android.

Every rational, sensible smartphone maker, who is in the Windows camp, has concluded that because Windows has no strong demand, they need another platform - and EVERY smartphone maker who is in the Windows camp, actually DOES sell more ON THE OTHER PLATFORM.

Nokia was the biggest smartphone maker, it is now in tenth place. Of all smarpthone makers in the Windows partnership, Nokia is the only one that insists on putting all its eggs in this one broken basket. Nokia is the only one that refuses to sell phones on any other platform. Even as it sees, clearly, that its consumers are rejecting the offering. Even when compared to clearly obsolescent Symbian - come on, you'd think ANYTHING is better than Symbian - even when offered the chance to migrate away from Symbian, to take Windows Phone, Nokia lost 93% of those it tried to migrate over the past year or so. And of those who remain, two out of three hate Lumia so much, they will never buy another. Nokia would have a plethora of options, the totally license-free Android, the world's most popular smartphone platform - and Google was begging Nokia to join its platform two years ago. They'd love to have Nokia come onboard now. Or if not Google, there is Mozilla's Firefox, there is Intel's and Samsung's Tizen. There is the African Ubuntu project and there is the Sailfish OS, an evolution of Nokia's own projects in the past. Blackberry had said it is open to licence the BB10 OS, which is getting better response than Windows Phone by that same MKM survey now.

And thats before we think of Nokia's OWN smartphone operating systems. (Nokia has to pay a royalty to Microsoft, but Nokia's own OS platforms are of course royalty-free to Nokia!!!) Yes, Symbian is old, but even the old OS managed to provide magnificent award-winning tech, like that on the 808 Pureview that won all cameraphone awards last year. Yes, running on Symbian! I am not suggesting going back to Symbian, obviously but there is MeeGo and Maemo, two Linux based operating systems that Nokia developed, Maemo totally in-house and MeeGo with Intel. MeeGo is the only OS up to now, that in side-by-side user tests, across the planet (in those miniscule markets where Elop dared to release the N9 phone) was rated BETTER than the iPhone !!! Who makes a smartphone and an operating system BETTER than the iPhone? And what moron CEO refuses to release phones on that system?

And before you have time to say 'but but but' - used - 2 year old used - USED smartphones on an 'obsolete' OS, MeeGo, the rare QWERTY slider-variant to the N9, the N950 (the ultimate QWERTY keyboard smartphone of all time) - are now selling for obscene amounts. One N950 just sold for 2,000 US dollars on Ebay (1,499 Euros) - oh, and thats not the peak they've paid. Think about that for a moment, all you iPhone-fanatics. You want your 650 dollar iPhone 5 on a contract so you can get it for 179 dollars? And some weirdo takes a similarly valued (at the time estimated retail price range for N950 in 2011 wasa about 600 Euros) and pays 2,000 dollars for a two-year-old touch-screen/QWERTY-slider Nokia on that MeeGo operating system? Yeah. MeeGo the OS that was regularly rated better than the iPhone. Not Tomi's silly words here, some phone fanatics will go buy them at astronomical prices even when used - yet Elop refuses to let Nokia sell it anywhere??? And while the world would love more MeeGo phones that would sell at huge profit margins, Elop insists instead to push Lumia. By the Nokia smartphone unit that currently generates a 20% loss per Lumia phone sold? What is wrong with this picture?

Especially, if your current system is rejected by existing customers at the rate of 93% and new potential customers at the rate of 96%. There is no management logic to Stephen Elop. He is a Microsoft mole. He is so desperate now, he is embarrassing himself and Nokia by for example throwing a TV interviewer's personal iPhone across the room in a TV interview. He is pathetic for suggesting that owning an iPhone is somehow 'embarrassing' - it being the world's most beloved and highest-loyalty (and most expensive) smartphone.

If Elop was acting in Nokia's best interest, he would understand that Nokia loyal customers are now abandoning Nokia not because Nokia's hardware tech is suddenly bad, its because Windows Phone is comprehensively failing in the market. An authority no less than Microsoft Chairman Bill Gates has said that the original launch of Windows on smartphones was working fine, but then Ballmer messed it up so badly that the current Windows strategy cannot succeed. It hasno chance of succeeding. Not my words, that is how Microsoft's Chairman described Windows smartphones currently. When this platform is not working, the smart thing is to offer customers some choice on some other platform. That is what EVERY one of the other Windows manufacturers is now doing, after they saw that Windows Phone had no support and didn't produce loyal customers. The only clueless f*ck CEO who refuses this very basic MBA 101 course logic, is Stephen Elop, who rather, when he HAD four smartphone OS platforms, killed all three that were popular and loved by Nokia users, and now insists on continuing with the platform that is most hated of all smartphone OS platforms out there. Yes. Windows Phone is the least loved, most hated, smartphone platform in production. No other Windows partner is foolish enough to put all their eggs in this broken basket. But Elop is. This is yet more proof that Elop is not acting in Nokia's best interest and must be fired immediately. And the Board for not firing him sooner, is clearly incompetent and must have its purge as well.

(Note - this article had a mistaken reference to a Kantar market survey in its first version, where I accidentially compared UK statistics to US statistics. I apologize. The mistaken reference has been removed)

March 06, 2013

So its that time again. I just finished the 2013 edition of the TomiAhonen Almanac, my annual statistical volume on the status of the mobile industry, and as usual, to celebrate that publication, I will do the big update to all the mobile numbers. You may want to bookmark this page for future reference

MOBILE NOW 6.7 BILLLION ACCOUNTS

So the monster number first. The global count of active mobile subscriptions reached 6.7 Billion at the end of 2012, and yes, this summer we will hit the 'mobile moment' ie that point in time when for the first time ever on this planet, a consumer technology will match the human population in size. The planet has 7.1 Billion people and as we grew subscriptions 14% last year, its rather clear we will hit that 7.1 Billion number around the summer of 2013. What was the penetration rate per capita at the end of last year? 93.7%. And there is no stopping that growth, don't listen to those who once again suggest that we are 'near saturation'. Hogwash! Several countries, led by Hong Kong are past 200% mobile penetration rate per capita. This growth is not stopping anytime soon.

So lets dig in. What does 6.7 Billion mobile subscriptions mean, then? They are not in reality all individual unique users, as we well know by now, many of us walk around with two phones, or others with one phone but several mobile accounts in the form of SIM cards. How many of the 6.7 Billion is the 'unique user' number? 4.3 Billion unique mobile phone owners/users on the planet. 60.1% of the true alive human population does have at least one mobile phone and at least one mobile account to themselves. Never has any technology been this widely spread. We are hitting the limits of electricity (600 million live beyond the reach of the electrical grid) and literacy (800 million adults are illiterate on the planet) yet even they do have mobile phone accounts. Some phones sold in the Emerging World are sold with extra-capacity batteries, other phones are sold with two or three batteries to help with the electricity problem. Vodafone introduced in Africa a charge that works on solar energy and for rainy days, through peddaling on your bicycle. And literacy? Yes, the illiterate won't be buying your smartphone apps anytime soon, but many voice-oriented services are highly appreciated delivering news, sports scores, music etc (and advertising) through the voice channel on the mobile.

ACTUAL PHONES - 5.2 BILLION IN USE

So then what of the phones? The planet has now 5.2 Billion mobile phone handsets in use, so for the 4.3 Billion unique users, so 26% of us - 1.1 Billion people already - walk around with two phones in their pockets. As I've been reporting on this phenomenon over the years, it is no longer a surprise in most markets. But yes, 5.2 Billion digital devices in human hands worldwide, every one of which can do voice calls and SMS text messaging. Most which have a color screen and often camera too. Most which can do rudimentary internet services (on WAP) and the vast majority which can do full HTML 'real internet' as well. While only 22% of all phones in use globally are 'smartphones' actually more than half of all phones in use can accept apps through such technologies as Java.

83% of all phones in use are cameraphones, so 4.4 Billion cameras are used in the world that are also connected to the network and are always carried, rather than the more premium stand-alone cameras that often sit in their cases back home. More than 90% of all humans who have ever taken a picture, have only done so on a cameraphone, not a stand-alone digital or film-based 'traditional' camera.

How massive is this? Mobile phones connected and in use totally dwarf any other tech, outnumbering television sets by more than 2 to 1, personal computers of all types, including tablet PCs like the iPad, by more than 4 to 1, DVD players by 5 to 1. Newspaper circulations by 12 to 1. Even after we account for us Westerners owning many FM radio sets, in our clock-radios, our boom boxes, our home HiFi sets and our cars, when counting for the whole planet, the number of mobile phones exceeds FM radios even, today. The second most sold consumer tech is the personal computer (including desktops, laptops and tablet PCs like the iPad) which has annual sales of about 350 million per year. The third most sold tech is televisions which only sell 250 million per year. Everything else is peanuts below that, from gaming consoles to cameras. But mobile phones? Sold over 1.7 Billion units last year! And by Christmas Quarter, nearly half of all new phones sold worldwide were smartphones. This year, 2013, we will see the cross-over point, where half of all new phones sold will be smartphones. No wonder the world's largest consumer electronics giant, Sony says that mobile is front and center of their future. Here is your table:

So who is the richest man on the planet? No longer Bill Gates of Microsoft, it is Carlos Slim the CEO of America Movil the Mexico-based telecoms giant. Apple Computer changed its name to just Apple when it launched the iPhone and today calls itself a mobile company. Samsung the world's biggest tech company makes half of its profits through the mobile unit. Companies from Warner Music to Electronic Arts to the Associated Press newspaper guild are turning to mobile to make more money. The BBC said that all broadcast content, TV and radio, will be available on mobile. Visa says the future of payments, yes, the future of money itself, is mobile. What is this industry like?

Well, as the global economy struggled to get some anemic growth in 2012, the mobile industry grew its revenues by a massive 12% and hit 1.45 Trillion US dollars in total for the year. The mobile industry set the record for the fastest industry ever to reach that massive Trillion-dollar level (far bigger than for example the PC or TV or internet or advertising industries, just so you have some context). This global economic juggernaut is fuelled primarily by our voice calls and mobile messages (SMS and MMS) but there is an increasing part of revenues coming from 'premium data' services and also a healthy slice from hardware, in particular the handset sales. 3 out of every 4 dollars earned in the industry was service revenues, the remaining 1 out of 4 is hardware revenues ie handsets, their accessories, and the networking infrastructure needed to run these massive mobile telecoms networks. The major breakdown of the industry revenue is:

So what do we do with our phones? I did the analysis of that statistic earlier, that we look at our phones 150 times per day. That gives a pretty good idea of where our time goes with the phone - messaging obviously, and voice calls, but also our clock and alarm, the calendar, our camera, the web browser, some games and music, news alerts etc. How do we use our phones? This is how I broke it down:

How Typical User Looks at Mobile 150 Times Per Day GloballyMessaging related 23 times per dayVoice call related 22 times per dayClock 18 times per dayMusic Player 13 times per dayGaming 12 times per daySocial Media 9 times per dayAlarm 8 times per dayCamera 8 times per dayNews and alerts 6 times per dayCalendar 5 times per daySearch 3 times per dayOther random web browsing 3 times per dayCharging phone 3 times per dayVoice mail 1 times per dayOther miscellaneous uses 10 times per dayTotal 150 times per daySource: TomiAhonen Almanac 2013This data may be freely shared

MOBILE HANDSET FEATURES

Then we of course look at the handset side of mobile in the Almanac. I devote a whole chapter to the handset numbers including the highly popular chart updating the global mobile installed base of the 5.2 Billion handsets in use, by their features. How many have a color screen, or have a camera, or have WiFi, etc. Here are the top-line numbers:

Much much more in the TomiAhonen Almanac 2013 including the penetration rates of touch screens, of QWERTY keyboards, the camera resolutions of cameraphones, etc etc etc, plus of course also the 'horse race' statistics of who sold the most phones last year by brand.

SMARTPHONE INSTALLED BASED BY PLATFORM

What of the mobile 'ecosystems' out there? You often hear of single quarter sales that may fluctuate a lot. Individual handset makers may shift their allegiances from one smartphone OS platform to another. What is the state of the industry now, by installed base of smartphone platforms. That is the 'bottom line' question, isn't it? I keep reporting the status of the installed base here on this blog as I do my quarterly review of the smartphone races. This is what the world looked like at the end of 2012:

But there is so much more in the Almanac. I have whole chapters on mobile advertising and marketing, mobile music, mobile social networking, mobile TV and video, mobile gaming, mobile messaging - yes, of course this year's edition includes OTT messaging cannibalization measured - etc, etc, etc. I give you counts of apps and voice calls and enterprise/business accounts and 3G migration rates. The Almanac includes a whole chapter on the Digital Divide, so it shows how the advanced 'West' or Industrialized World mobile numbers differ from the 'Emerging World' where most people live, in Africa, Latin America and the less-developed parts of Asia like India, China, Indonesia, Pakistan etc. I also give more details on the business-side of this newest and fastest-growing Trillion-dollar industry ever, like my exclusive TomiAhonen Consulting index of mobile leadership that many seem to like and use.

WHAT COUNTRIES ARE THE GLOBAL LEADERS IN MOBILE INDUSTRY AND INNOVATION

Here is the newest top 12 ranking of the world's most advanced countries by their mobile industry, handset, consumer and services maturity:

And yes, the USA is gaining on that chart, and has moved up from its rank last year of 17th to its current ranking of tied for 15th with the Netherlands, just ahead of UAE, and just behind Israel and Norway. But when the USA is barely past its 100% per-capita mobiel subscriber count - and Hong Kong for example has passed 200%, or the USA is near 50% smartphone ownership where Singapore is past 80%, and where the USA still sells handsets and subscriptions to second generation 2G network based technology while Japan has shut down the 2G networks and is all 3G or faster, obviously there are other countries that are well ahead of the USA in their mobile industry. Harsh truths, but we deal with the truth on this blog. And yes, for those who do not know my index, I use the four most used and most representative statistics on the maturity of the industry, to generate my index: the mobile phone subscription penetration rate per capita; the migration rate to more advanced networks, the mobile service adoption rate, and the migration of the handsets to more advanced phones (ie currently measuring the migration from dumbphones to smartphones). And most international mobile industry experts will agree that Japan, Singapore and South Korea are world leaders in mobile, and that Finland, Sweden and Italy are the European leaders, where the Industrialized part of Asia and advanced parts of Europe are well ahead of North America, Latin America and Africa in their mobile adoption and yes, Australia is well ahead of North America as well. By the way, the Almanac has much more on the index and the top 30 countries if you need more.

But there are much much more data points in the Almanac, including a stats table section where we have the 60 biggest mobile countries and details on them like their subscriber counts, penetration rates per capita, and exclusively, also their unique mobile owner counts, plus such data as what countries have launched 3G and what have launched MVNO services etc. There are tables of what countries lead by subscriber counts, by penetration rates, by 3G migration rates etc. And there is the list of the biggest mobile operator groups.

WHO ARE THE GIANT COMPANIES OF THIS TRILLION-DOLLAR INDUSTRY?

And as always, the TomiAhonen Almanac includes my exclusive listing of the world's largest companies, when measured only by their mobile revenues. So for example for Apple we remove the Mac, iPad and iPod related incomes, for Vodafone we remove their fixed landline business and for Samsung we remove their plasma TV business and chips business, etc. What are the world's largest companies in 2012 when we only measure their mobile business? This is what the top 10 looks like for 2012:

The above data shows how strongly Apple and Samsung have already jumped up the charts powered by their smartphone businesses (and by contrast, the once giant 'Nokia Mobile' has tumbled down to 12th and is falling further). The European operators/carriers saw their industry hit by the new EU regulations that cut their international interconnect revenues, so all Europe-based carriers/operators saw a bad fiscal year and their rankings tumbled for the year. That should stabilize now for the next year. And as to Samsung and Apple, remember, their phenomenal growth is continuing. This data was through only the second calendar quarter of 2012, to harmonize this chart with the annual Fortune Global 500 issue. So the two smartphone maker giants are sure to move up even more for next year.

So there is your summary data for the industry for big industry numbers. This year, two huge milestones coming - the Mobile Moment will hit us this summer, when the count of active mobile subscriptions will match the count of human population alive on the planet, and also probably in the summer, we will reach the point where half of all new phones sold will be smartphones.

As always, you may share and use any data in this blog, create your own diagrams and pictures, use this data in infographics etc. Please refer to this blog if you can, or just list that the source is the TomiAhonen Almanac 2013.

And for those who want to see it, or order it, remember the Almanac only costs 9.99 Euros and you can have all these stats - and literally 91 more charts and tablets not mentioned in this blog (the latest Almanac has 98 tables and charts in total) - on an ebook you can install onto your smartphone, iPad or laptop and carry all the mobile data at your fingertips. For those who already own the 2012 edition, all the data is updated obviously, and new charts in the 2013 version that weren't in the 2012 edition are: 150 Times Per day (in mobile Customers chapter), a chart showing MMS migration rate from SMS and another showing OTT cannibalization are new, while the OTT user count is added to mobile messaging user chart (in Messaging chapter), the Social Networking chapter adds a table of the biggest social networks when measured by their mobile users. The 2013 edition of the Almanac runs 194 pages. To see more here TomiAhonen Almanac 2013.

That was the first 8 pictures. Today we do number 9 in the series, and today's is perhaps the single most important picture of them all. This is the ultimate test for Nokia, how Nokia will be remembered decades into history. When people look back at Nokia of this time, this is the one decisive factor, the one picture, the one measure. It is what I call the Misery Graph.

Nokia faces a 'paradigm shift' in the technology space. The total market of what we now call 'dumbphones' or Nokia sells as 'featurephones' will be shifting to something else, called a 'smartphone' Sometimes industries see total such shifts, as we saw for example in televisions from black-and-white TV sets to color TV, and then again, from picture-tube based CRT TVs to flat screen televisions of today. These are total industry shfits, if you do not capture the shift, you die. Like the world's biggest TV makers RCA and Philips back in the days of black-and-white TVs and color TVs, who are gone from making TVs today, replaced by Sony and Samsung. Other technology evolutions, while revolutionary, are not 'paradigm shifts' because they do not shift the whole industry. Diesel engines in cars, jet engines in airplanes, did not end other engine types like gasoline engines in cars, propeller-driven planes, even as their proportion has kept growing. So you can safely survive as a car maker not offering diesel engines, or being an airplane maker without jet engines. Maybe your market is not as big, but that is viable. Trying to sell black-and-white TV sets is not.

The handset industry saw its first paradigm shift already, going from analog to digital phones. Motorola was the giant handset maker in the analog days, Nokia came and grew strong with digital phones, and Motorola fell from the top by not capitalizing fast enough on the new digital phones and their new non-voice capabilities such as SMS text messaging and rudimentary mobile internet services. Motorola withered and died and was bought by Google.

Now the handset industry faces its second such total paradigm shift, from dumbphones to smartphones. Right now, latest data from Q4 of 2012, has the world transition having reached 46%. It will pass the 50% level - meaning half of all new phones sold will be smartphones - soon this year, 2013. Eventually all phones will be what we now call 'smartphones' and the dumbphone market will vanish. So how is Nokia doing in this transition?

Nokia was doing just fine. Nokia in fact invented the smartphone. Nokia was punishing its rivals, the other dumbphone makers like Motorola, LG, SonyEricsson, Siemens, Panasonic, Sharp and Samsung - pushing them into loss-making or quitting the handset business while Nokia made a profit every single quarter of every single year, in its smartphone unit. Nokia invented the smartphone, and Nokia kept safely ahead of the industry migration rate - not too far ahead, but about 4%-5% ahead of the industry migration rate, as Nokia helped its customers transition from using dumbphones to smartphones, while safely holding onto its massive global lead in handset sales.

Nokia was such a master at this transition - that differing from every other rival dumbphone maker attempting this transition - only Nokia was able to GAIN market share while migrating customers from dumbphones to smartphones. Yes. Nokia's massive global market lead in total handsets, fuelled at the time by dumbphone sales, was actually improved when shifting customers to smartphones. And yes - Nokia's smartphone unit was profitable doing this!

By every textbook measure, this was the very definition of success in a technology migration. Nokia not only saw the transition coming, Nokia invented it, and then dominated the whole transition process, where Nokia, the world's largest handset maker, actually had a bigger lead in its smartphone - future handset business - than the massive lead it had in the dumbphone business. This, done profitably, is what success looks like. This is what Nokia will be measured upon, and Nokia was doing it brilliantly. Spanking such global tech giants as Sony, Samsung, Motorola and LG in the process. Wow.

Then came a clueless new CEO who decided to snatch defeat from the jaws of victory. This is what happened.

This slide may be freely shared

Nokia's global sales did not disappear. Nokia customers keep coming back. Its the transition that suddenly failed. What were highly desirable, well-selling, well-designed 'world phones' that Nokia sold, at a wide price range, in vast array of functionality and features, from world's best cameraphones to QWERTY sliders to advanced operating systems like Maemo and MeeGo, Nokia was the ONLY dumbphone maker in 2010, whose loyalty was so high, most who owned a Nokia wanted another. Only Apple and RIM/Blackberry - both pure smartphone makers - had better loyalty at the time. Nokia was winning the transition.

Then new CEO Stephen Elop decided to badmouth his own smartphones as uncompetitive (the notorious Burning Platforms memo, the costliest management memo of all time) that caused what is called the Ratner Effect. When a CEO says his own products are bad, he is believed, and sales collapse overnight.

And the new CEO Elop also decided to utilize another corporate-suicide trick, the Osborne Effect by madly announcing his new Microsoft partnership in February of 2011, when he had no Windows based smartphones to sell until November. This of course collapsed existing sales, just like with the Osborne computer company and Nokia smartphone sales set a world record in sales crash in one year. These two effects, when combined (they happened within 3 days of each other in early February 2011 is what I coined as the Elop Effect and increasingly that is seen as the dumbest management communication attempt of all time, causing the single worst destruction of any Fortune 500 sized company business, in human economic history. Yes, this is far worse damage to the company, than what Coca Cola did with New Coke or the Ford with the Edsel or the BP Oil Spill or the brakes disaster at Toyota.

So Nokia was strongly leading the transition to smartphones. Now under Elop Nokia is regressing and fast. The industry transition for the year 2012 was 39% to smartphones, Nokia was down to 10%. If you think it was getting better at the end of the year, no it was not. By Q4 the world transition level was at 46% and Nokia's migration rate to smartphones was down to 8%. Nokia is truly going in the suicidal direction of this industry.

How can I put it in clear terms. Imagine if Philips or RCA saw the new color TV's taking off, selling well, and suddenly deciding, no, thats not the future of televisions, we shut down our color TV production and do only black-and-white TVs.

Or more recently, if Samsung or Sony looked at their TV sales shifting from the bulky CRT based TV-tube type of television sets, and saw customers preferring flat screen TVs and then they shut down their flat screen production and pushed bulky picture-tube TV sets instead? How mad would that be?

Or what if Panasonic and Sony and other video cassette recorder makers, had seen the success of DVD players, and then - as DVD sales are exploding, suddenly decide to shut down their existing DVD player production, and shift their business to VCRs intead?

I could go on. Rotary dial phones? Analog cameras? Wrist watches that you wind manually to make them run? Dot matrix printers?

There are already operators/carriers like Safaricom in Kenya who say they will stop selling featurephones altogether. They will only sell smartphones. Yes, the world will pass this year, 2013, the half-way-point, where half of all new phones sold are smartphones. Nokia was far ahead on this transition. Now they are literally selling or shutting down smartphone factories, and Elop is introducing ultra-low-cost phones that cost 15 Euros/20 dollars to sell the superdupercheap phones. Dumbphones. This will be the classic case study in how to abandon a sure victory, how to snatch defeat from the jaws of victory, how to set up a certain road to the future, and then gift that to competitors and refuse to take that road yourself. This graphm the Misery Graph is not just what Elop will be known for in all eternity as the biggest Business Failure in history, but also how Nokia will be known. How they voluntarily abandoned certain victory.

In the long run for Nokia survival and success, nothing matters more than this one picture. The whole handset business will transition away from dumbphones and 100% to smartphones. This is now no longer under any argument or disagreement. The price points of smartphones are coming down and squeezing the dumbphones out of the market, it is only now a matter of time. Nokia's only measure ten years from now, like we look at Motorola in the digital transition, is will Nokia be able to win in the transition to smartphones - as it was winning - or will the story be, that Samsung came and took Nokia's candy while the CEO madly pursued low-cost featurephones and missed the transition to smartphones. The only thing that matters for Nokia's history is whether this transition was successful or not. It does not matter what awards some Lumia phone won or lost, what carriers it attracted or not, was the Windows ecosystem the third or fifth or whatever, what profits Nokia pretended to earn in a quarter by selling its HQ building or its Salo campus, etc. The only thing Nokia will be remembered for, ten years from now, is did they win or lose the transition to smartphones. In 2010 Nokia was safely a full 5 points of migration rate ahead of the industry, Nokia had migrated 23% of its phones to smartphones, while the industry was only at 18%. Now at Q4, the world has gone to 46% and Nokia is down to 8%. This is how Nokia will be remembered, it lost the transition. The clown in charge was the management fool named Elop, worst CEO of all time. Because Elop lost that race, he has to be fired for that reason alone (not to mention all his other madness)

Why is Elop allowed to remain in control of Nokia? Why is Nokia's Board allowed to remain in control?

And there is still more to this Nokia disaster, more pictures and stories to come.. This is so sad, seeing Europe's biggest tech giant destroyed by a delusional Canadian madman who wants to shift the inventor of the smartphone, Nokia, back to the 1990s.

February 20, 2013

So who's your daddy in mobile numbers? Lets look at the
forecasts made about Windows Phone, after the Nokia-Microsoft partnership was
announced. If you remember, I recently examined the accuracy of the Nokia forecasts made (and found that I had once again been the most accurate forecaster in mobile. But will that reputation hold through this, very challenging Windows Phone forecasting conundrum?)

When the world's largest computer software company has said
that the future of computers is mobile, and then sees its position in software
for mobile phones (ie smartphones) fall from 12% and second biggest to 2% and
6th in the market - and at that point, promises to grow back to a 'third
ecosystem' - it is either being brave with a cunning plan, or being foolish
with forlorn hope and hype.

SELLING THE DAYDREAM

But it is the corporate CEO's job to sell new strategies to
investors and partners. It is the analyst's job to evaluate that prospect - and
to give guidance on how it might pan out. Nobody can ever guess perfectly what
happens in the future, but a good analyst makes forecasts that are close to the
truth - and less wrong than forecasts by others. That Steve Ballmer of
Microsoft and Nokia's new CEO Stephen Elop were peddling silly stories of
Windows becoming a 'third ecosystem' - they should not be faulted for that (but
they should be held accountable for what they achieved). A CEO should project
optimism about his company and its products and its future (compare to say,
Burning Platforms memo by Elop). The test of the analyst is to see who drank
the cool-aid on silliness and who saw through the bullshit and told the truth.
So lets examine forecasts made about Windows Phone for 2012. First, the
reality. This is what Microsoft's Windows smartphone sales looked like in the
recent past when the forecasts were made, so you have some context:

This was at a time when the global smartphone market more
than doubled in size. Microsoft achieved that underwhelming performance, even
as its Windows based operating system was supported by six of the ten largest
smartphone makers at that time - Samsung, HTC, LG, SonyEricsson, Motorola and
Palm.

But Nokia - Microsoft's new partner (and not just 7th of the
10 largest smartphone makers, at that time the largest manufacturer), sold
103.6 million smartphones during 2010, using its own operating systems, Symbian
and Maemo. The new CEO, Stephen Elop, promised to migrate the user base
(intending to achieve the transition at the rate of 1-to-1 in fact) to Windows.
If this golden fairy-tale could come true, theoretically, the Nokia+Microsoft
marriage could perhaps produce sales of 119 million smartphones per year which
should all be Windows based by the end of 2012/early 2013, when this transition
was to be completed. 119 million smartphones sold in 2012 would give you 17%
market share. That was the 'promise' of this partnership.

However, both Nokia and Microsoft messed up (one might use a word more
appropriate, that rhymes with plucked up) this opportunity royally, from the
very start when Elop released his destructive Burning Platforms memo, to when
Microsoft purchases Skype and angered the carrier community, to the faulty and
poorly-designed Lumia series of smarpthones that were then launched to try to
dupe customers into accepting Windows with Nokia, to the denial of a migration
path for current Lumia owners into the new Windows Phone 8 environment by
Microsoft. The whole strategy, flawed as it was, has been then executed
miserably, to pitiful results. We all know the results. IDC just reported for full
year 2012, Microsoft managed to sell 17.9 million smartphones (and by their
calculation, Microsoft landed with 2.4% market share for the year). Gartner
counted a bit less, found Microsoft with 16.9 million smartphones sold in 2012,
but as their total for the year was also less, Microsoft's market share was a
sliver better, at 2.5% for the year.

So we know it failed. But what about those forecasters two years ago? Lets
examine how well the analysts saw through the Microsoft smoke-and-mirrors and
Nokia's new miracle-cure salesman CEO. To get the number we will use as the
benchmark, lets take the average of the two published numbers Gartner and IDC, to
find the very close to truth number, which is 17.4 million Windows based
smartphones sold in year 2012.

FORECASTS BEFORE ANY DATA WAS AVAILABLE

Then lets turn to the analysts. From February 11, 2011, when Nokia and
Microsoft announced their partnership, to November 2011 when Nokia released its
first Lumia series smartphones running on Windows, there were six major mobile
industry analyst houses that released a forecast for Windows Phone sales into
2012. They were IDC in March, Gartner in April, Pyramid in May, MIC in June, my
consultancy, TomiAhonen Consulting in July, and Strategy Analytics in October.
This is what the forecasts looked like:

Source: TomiAhonen Consulting summary from public source
analyst press coverage and industry data
This table may be freely shared

Note the forecasts without asterisk gave a distinct number of smartphones sold
in 2012, the ones with asterisk gave a market share number, which I have
converted now to a number, as we know the final sales of smartphones in 2012
globally was 695 million units. My rival 'experts' are in red. The real
Microsoft performance is in blue. My forecast is in yellow.

So? I was off by 111%. That might seem awefully bad forecasting, until you see
that the next most accurate forecaster, IDC, was off by 283% and Gartner, next,
was off by 292%. Even as I was off by one whole measure, my accuracy was still
more than twice as good as the next best analyst who was off nearly 3 times
from the reality. Then look at the others. Strategy Analytics was off nearly
4x, at 397% error. MIC was off by 571%. And Pyramid - the most ludicrous forecast
perhaps of all time in mobile - was off by over 1,000 percent !!! (I did warn
readers when the ridiculous Pyramid forecast was published, that it was based
on so many faulty data points, it could not possibly bear any resemblance with
reality. Like I said back then, it is a disgrace and Pyramid should apologize
for that ridiculous forecast and fire the 'expert' who produced that outrageous
projection).

REVISIONS WHEN DATA CAME IN

So then, we have data that came in as the first Lumia smartphones were launched.
Remember the flawed first flagship, the Lumia 800, that was plagued with
hardware and software bugs. The alarm clock that didn't wake up, the time zones
that didn't recognize Nokia's home country of Finland, etc. And the immediate
price cuts. The smartphone with the infamous 101 faults list of problems that
traditional Nokia smartphone owners would grow to hate. The smarpthone that
achieved a Nokia record for returns and an instant resale value collapse
approaching zero. This where carriers and customers craved for the hugely loved
award-winning Nokia N9 instead, running MeeGo. Many European carriers said the
Lumia with Windows Phone was not suited for the mature experienced tastes of
the European customers who were not new to smartphones (like American consumers
were). European carriers begged for Symbian based smartphones instead from
Nokia.

Then we had the first revised Lumias, led by the new flagship Lumia 900. Now
Nokia was supposed to win over America. The flagship plagued with software
bugs, and a badly timed launch. The notorious 101 faults list was expanded to
121 faults. Then the consumer survey of US buyers of the Lumia by Yankee Group
found that four out of ten buyers rated it the worst phone they had ever seen. Meanwhile
store sales surveys found that sales reps who had the Lumia in stock would
refuse to show it to customers asking for Lumia by name it was that much hated
by sales reps for the high return rates. Nokia sales plummetted, the prices
were slashed, and Lumia reputation was in tatters. Many carriers refused to
carry the Lumia 900 altogether, but the parallel 808 Pureview running Symbian
could not keep up with demand and propelled Nokia's 'obsolete' Symbian platform
to outperform Windows Phone once again. And suddenly Microsoft Osborned all
existing Lumias by forbidding any upgrades from Windows Phone 7.5 to Windows
Phone 8.

Then we had the third attempt by Nokia to relaunch the Lumia, led by the new
flagship Lumia 920 that was supposed to bring Nokia back in China, the world's
largest smartphone market. Still, by Christmas of 2012, the Nokia flagship had
a camera that was bested by the Symbian based N8 from three years before. The
Lumia 920 stole the name 'pureview' from the 808 without bothering to take the
technology, causing severe disappointments to buyers. The consumer survey by
Bernstein of smartphone loyalty found that two out of three Windows Phone
owners were so disgusted by their new device, they would never buy another
powered by Windows Phone. The new Windows Phone 8 based Lumia series was sold
in tiny numbers before Christmas, then missed the gift-giving season for
Chinese New Year, and saw an instant price collapse.

That is the reality of Windows Phone with Nokia and Lumia. Some of that reality
was obvious by the first phones when they were released. So what does an honest
analyst do with his or her forecast? When the facts change, you change your
forecast accordingly. That is what honest analysts do.

Who did that? MIC revised their forecast (downward by 23% in January 2012). IDC
revised their forecast (downward by 46% in June 2012). And TomiAhonen
Consulting, of course, me, I revised my forecast (downward by 40% in May of
2012).

Note first - that Gartner, Pyramid and Strategy Analytics - were content to
leave their outrageously faulty forecasts to remain as their opinions of how
Windows Phone would sell in 2012, all through 2012. I think this speaks very
poorly of their mobile competence.

Then about MIC, IDC and me. Yes, good for you, MIC and IDC that you downgraded
your Windows Phone forecasts during 2012, as the facts came in and your first
projections were clearly overly optimistic (as was mine). But did you inform
your customers that you had downgraded Windows Phone forecasts? No. You did it
without any mention. No explanation at all. Just that the new forecast issued
in 2012, was MASSIVELY smaller than the one you had released the year before. I
think this is not professional behavior. A professional forecaster explains why
his or her forecast is changed. What caused the change. As I did on this blog,
of course, in May of 2012.

SHORT-TERM FORECAST ACCURACY FROM EARLY 2012

But that is not all the forecasts we had for Windows in
2012. We've actually had three new forecasts for Windows Phone for 2012 (in
addition to those three revised ones) issued by June of 2012. (I am closing the
timing for these forecasts in June. Why? Because we are forecasting year 2012
sales, and by July there will be two full quarters of sales for the year 2012 reported.
So then its no longer a complex forecast to guess what the second half of the
year will be and what level Windows might end up with in 2012. So I am cutting
off the forecasts in June.)

So here are the forecasters with Windows Phone forecasts made in 2012 up to
June. They are Morgan Stanley, Credit Suisse and IHS in January. Plus the three
revisions, MIC in January, my TomiAhonen Consulting revision in May, and IDC's
revision in June. This is the accuracy of the Windows Phone forecasts made
during the first half of 2012, for how Microsoft Windows Phone sales will end
up for the year 2012:

Source: TomiAhonen Consulting summary from public source
analyst press coverage and industry data
This table may be freely shared

IDC's revised forecast was now far more accurate, they are off by only 108%
from reality. But note, theirs was a revision and done last in this series,
you'd expect it to be one of the more accurate ones. Morgan Stanley did a very
good job back in January with an error only of 147%, would have been second most
accurate forecast up to that point (second only to my original forecast in mid
2011). iHS was off by 259%, while Credit Suisse was off by a very sad 419%. And
what of MIC. They took their 2011 forecast which was off by 571% and managed to
'correct' that to one that was off 'only' by 419%. Pathetic in terms of a
correction and accuracy.

WHO IS MOST ACCURATE FORECASTER IN MOBILE (ONCE AGAIN)

What of the most accurate forecaster in mobile? After I saw what the first
Lumia was like, I of course downgraded my forecast and said in May of 2012,
that Windows Phone would sell 22 million total smartphones in 2012. While that
was still off by 26% - Windows Phone only managed 17.4 million - I was four
times more accurate than the second most accurate forecaster in mobile, IDC
(revised forecast from June 2012).

So who's your daddy? These forecasts were made here on this blog, out in the
open, clearly warning the industry, that the Windows Phone 'strategy' was
doomed and untenable. Now we have heard from no less than Microsoft Chairman
Bill Gates himself, admitting that the Microsoft smartphone Windows Phone
strategy has failed. He used the clarifying term 'clearly' failed. There is no
question this is total failure. And Bill Gates admits in his Charlie Rose
interview that this strategy is also fundamentally flawed in that it is
incapable - the strategy is incapable - of achieving leadership for Microsoft.
And yes, this is what misery or 'clearly a mistake' looks like:

Source: TomiAhonen Consulting from public analyst and
industry data
This table may be freely shared

Yeah, I told you so... You could listen to Gartner or IDC or iHS or MIC or
Strategy Analytics or Morgan Stanley (or god forbid, Pyramid) and be misguided.
Or you could follow the consistently most accurate forecaster in mobile, the
author of 12 books on mobile, the man who is less wrong than others, and more
often right than anyone else, in predicting this industry's future. Yeah, its
nice to gloat for once, after all the shit I've taken on this blog by the
Microsoft trolls who came here to ridicule me over the past two years. Well
whose laughing now? Go ask Bill Gates if Windows Phone can ever become the
'third ecosystem' in mobile.

January 30, 2013

So we continue the Nokia management disaster, studied through a single issue, and single picture per blog. Today we examine management judgement by CEO Stephen Elop. So before I continue, this is a series of blog articles to study the Nokia mess.

Now lets examine whats going on inside the head of the CEO who wants to be called 'The General' and who pretends to be a strategic thinker. Elop's name will always be tied to the most damaging management memo of all time, the so-called 'Burning Platforms' memo. A memo which cost Nokia 13 Billion dollars of revenues wiped out, and 4 Billion dollars of profits destroyed. A memo that Elop himself has since admitted, caused damage to Nokia smartphone sales. The costliest memo of all time. How can a CEO be allowed to destroy 13 Billion dollars of revenues - and wipe out 4 Billion dollars of profits - and allowed to remain in charge? Why is Elop still running Nokia. I have started an 'Elop Firing Watch' via Twitter, where my followers picked dates of when they think Elop will be fired.

WHEN IS A PLATFORM ON FIRE

So we come to today's picture. This is a picture about the mental ability of CEO Stephen 'Call Me The General' Elop. Is he really a sharp, strategic thinker. Or is he a delusional psychopath. Lets remember, delusion is a severe insanity of the kind, where a madman looks at facts, refuses to accept them, and substitues his/her own alternate imagined fantasy instead of reality.

This is Nokia's situation as of February 2011 and as of February 2012. So the data is according to the just-ended fiscal years (2010 and 2011), after Nokia has just reported its final annual results at the end of January. This is what Nokia looked like, and what Elop, the Chief Executive Officer said about his company and its smartphone business at the time:

This picture may be freely shared

On February 9, 2011, looking at the just-ended, just-reported Nokia fiscal year 2010, Nokia's new CEO sees Nokia is more than twice as big as its nearest rivals including Apple's iPhone - and Nokia grew more in 2010 than Apple so the gap between Nokia's smartphone and Apple was increasing - Apple was not catching up, Nokia was pulling away from Apple. Nokia set a world record in growth in smartphones in 2010. Nokia did this profitably - how profitably? Nokia set a Nokia-record in growth in revenues and a Nokia record in profits in its smarpthone unit - and the Nokia profitability in the smartphone unit grew towards the end of the year, setting also a Nokia quarterly growth record. Nokia's smartphone revenues were second largest in the industry behind only Apple's, and Nokia's profits were also second largest in the industry, behind only Apple's.

You are the biggest, you grow the fastest, you set a world record in growth. You do this with increasing revenues and increasing profits, both of those company-wide records. This, is what the CEO calls a strategy that is failing, and failing so badly, Nokia apparently needs desperately a new strategy, and Nokia is on a 'burning platform'. Delusion is the type insanity where you are able to look at facts, refuse to accept them, and to substitute an imagined fantasy insteady of the reality.

Then lets fast-forward 12 months. Nokia has announced the new strategy by Elop. The Nokia record-setting growth in smarpthone unit sales, turns into a world-record collapse in smartphone unit sales. Nokia proceeds to set a world record fall in smartphone revenues in that year. And Nokia produces its first-ever loss in the smartphone unit - thus a Nokia record failure in the unit that is supposed to deliver the future to Nokia.

You set an industry record crash in unit sales, an industry record collapse of revenues, and the unit that invented the smartphone and the only legacy handset maker to do profits with smartphone sales in every single quarter of smartphone existence, suddenly produces a loss. This, the CEO now says that Nokia is "no longer on a burning platform", and that "Nokia's future is secure", and Nokia is in "an era of growth". Delusion is the type insanity where you are able to look at facts, refuse to accept them, and tosubstitute an imagined fantasy insteady of the reality.

I am not making this up. Elop looked at Nokia's record-setting industry-crushing dominating year 2010 in smartphone growth, highly profitably, and sees 'distress' and 'disater' and 'failure' and panics, and abandons Nokia's winning ways, and issues his Burning Platforms memo (totally full of delusional lies by the way). Elop says that Nokia has "fallen behind" the competition and if continues on the same path (that had just grown faster than the competition) Nokia would "get further and further behind, while our competitors advance". That was February 9, 2011, two years ago.

Then yes, Nokia went to set a world record failure in handsets, Nokia fell in the next year, 2011, worse than Motorola or Palm or Siemens or RIM. Nokia literally set a world record collapse in handsets. The unit sales set a record in collapse, Nokia smartphone revenue fall is a world record, and the perennially secure profit-machine was turned upside-down to produce its first-ever loss. This, the CEO says on February 13, 2013 in an interview to Business Day that "Nokia is no longer on the edge of a burning platform" and "Nokia's future is secure" and Nokia is "facing a new era of growth."

Delusion is the type insanity where you are able to look at facts, refuse to accept them, and to substitute an imagined fantasy insteady of the reality.

ELOP WAS THE ARSONIST

The Nokia smartphone platform was not on fire in 2010. Nokia was more than twice as big as its nearest rivals - this is such enormous dominance of an industry, that Toyota has never enjoyed such a massive overpowering lead in cars. Neither has GM or Renault or Volkswagen or Fiat - ever. That dominance is so huge, Hewlett-Packard has never had the pleasure of being twice as big as its nearest PC maker rival. Nor has Dell, nor has Lenovo or IBM or Apple or Compaq or Toshiba or Acer or Asus or Fujitsu etc. But not just was Nokia twice as big as its nearest rivals - Apple's iPhone and RIM's Blackberry in smartphones, Nokia was growing more in 2010 than its nearest rivals - the gap was increasing. Nokia did this with highly profitable business, with increasing revenues and increasing profits. Towards the end of the year, when Elop took over, Nokia's smarpthone unit average sales prices jumped up at a Nokia-record, the revenues for the first time grew bigger than the traditional 'featurephones' ie 'dumbphone' unit - and the jump in Nokia's profitability set a Nokia-record. Nokia's loyalty was so strong, in an independent UK survey by Right Mobile Phone Nokia's customer base had the highest retention rate of any handset brand.

Nokia's Symbian was the bestselling smartphone OS, and it was the biggest OS by installed base, and it was the bestselling smartphone OS in China, the world's largest individual country market for smartphones, and Symbian was the bestselling smarpthone OS on the continent that sold most smartphnoes, Europe. Symbian was the bestselling smartphone in the country with the biggest growth of mobile in 2010, India, as well as the bestselling smartphone in the continent with the biggest growth of mobile, Africa. Nokia's Ovi was the second bestselling app store behind only Apple's iPhone App Store, except that Ovi was available with over 100 carriers supporting it, with apps in over 60 languages, growing far faster than Apple's iPhone App Store. Nokia's Qt was being introduced as the app developer tool to provide apps across multiple smartphone platforms including Symbian, Maemo, MeeGo Moblin, initially, and soon also Blackberry, Android as well as the featurephones running Nokia S40. Qt would shortly reach twice as many devices as the installed base of Windows on PCs, tablets, and smartphones.

This is what the CEO calls a 'burning platform' and forces Nokia to quit the winning - not winning, utterly DOMINATING strategy, and instead to select the weakest, tiniest, unproven, unloved platform by the company known for plunging its 'partners' to loss-making and bankruptcy, Microsoft. When you take a winning strategy and turn it into world-record collapse - you have set your platform on fire. You, CEO Stephen 'Call Me The General' Elop are an arsonist. There was no fire on Nokia's platform, Stephen 'Call Me the General' Elop. No. There was no fire. The platform was not burning. You set it on fire, Mr Pretend-Patton. You, and only you. Nokia's smartphone platform was the strongest in the industry in 2010, by far the most overpowering, winning, dominating strategy. 77% market share in the world's biggest smarpthone market, China! The strongest loyalty in the UK. The second-biggest app store in the world, closing in on number 1, Apple. Nokia record profits, Nokia record revenues and the world's biggest smartphone unit sale growth. There was no fire on that platform at Nokia. You took it, and set it on fire. You are a menace. You are a psycopath!

NOW WHAT OF YEAR 2012

Lets fast-forward to today. Now we have seen a second year in the Elop new strategy era. This is what the picture looks like now. Nokia has broken its own record in failure, yes, setting a new world record collapse in smarpthone unit sales, to catastrophic levels in 2012, and also set a new world record in smartphone revenue crash, and now Nokia also sets a world record loss in smartphone sales. What does the CEO think of this performance?

This picture may be freely shared

Now just over a week ago, Elop told us that he is "very encouraged" that Nokia's "execution against our business strategy" has "started to translate into financial results". Financial 'results' yes, if by results you mean not just Nokia-record losses, but handset industry record level losses. That is a 'financial result' yes, but not one that any CEO would be 'very encouraged' by, unless it is your intention to destroy Nokia?

Delusion is the type insanity where you are able to look at facts, refuse to accept them, and to substitute an imagined fantasy insteady of the reality.

In 2012, Nokia took its own world record collapse in smartphone unit failure, and managed to do even worse, setting a new world record in failure. Nokia took its record-setting revenue collapse in smartphone sales, while the global smartphone industry exploded growing over 40% in units and over 30% in revenues, and Elop managed to wipe out 55% of Nokia smartphone unit sales and 50% of Nokia smartphone revenues - from year 2011 that was already a world record setting failure year for Nokia and Elop's new strategy. The defintion of insanity is to do the same thing and to expect a different result. In 2012, Nokia took its company-record loss in the smartphone unit, and made it far worse, producing a world record loss by any smarpthone maker, in 2012.

Nokia's new Lumia smartphones running the Windows Phone by Microsoft, are the worst smartphones Nokia has ever launched. With the last edition of Symbian, a new launch of a new version of Symbian did 5 million units in one quarter in Q4 of 2010. Now with these new Lumia smarpthones, after 5 quarters, Nokia has yet to even match that in any quarter, the very best that Lumia has managed is a paltry 4.4 million units - five quarters after launch - while the smartphone market has more than doubled in size in the mean time. The Lumia series is plagued with failures and problems and bugs. The Lumia buyers hate the devices so much, in an independent survey of Lumia buyers by Yankee Group in 2012, four out of ten Lumia buyers rated it the worst phone they had ever seen. The loyalty of the Windows Phone series is so bad, the Bernstein survey of smartphone brand loyalty found that two out of three who were hoodwinked into buying a Lumia, hate it so much, they will definitely never buy another Windows Phone smarpthone again!

The Lumia series has the hightest return rates of any phone made by Nokia ever (customer returning phones after purchase). The Lumia series has the lowest resale value of any Nokia phone ever released, in many markets the resale value is already zero. It may amuse American readers but yes, in Africa, India, Indonesia, Brazil, China, much of the rest of the world, handsets are sold second-hand, like cars. Your resale value is a significant factor in how much you are willing to pay for your new phone, especially as most people live in countries where phones are not subsidised by the carriers and sold on 2 year contracts. Consumers pay full retail prices for their handsets, ie the real price of an iPhone is 640 dollars, not the 179 dollars that AT&T advertises on a 2 year contract. Back to Lumia, the European carriers for example said, that the Lumia series is not suitable for European consumers, and the carriers have effectively boycotted Lumia sales from the start. The very latest survey by the Telegraph in the UK this past week found that in-store sales staff won't offer Lumias to customers asking for smartphones, they offer Samsung Galaxies instead.

The Windows ecosystem is dead, it is the sixth of six, literally the smallest in existence. It has not been growing, it has been shrinking. The Windows ecosystem has a modest catalog of apps primarily because Nokia was paying app developers to build Windows versions of their apps (and so did Microsoft too, offer payments when developers simply refused to bother to develop apps to the tiny ecosystem). The traffic generated by Windows Phone apps is so miniscule it doesn't register on most measurements, while ironically, Symbian still runs biggest or second biggest app environment on the three most populous of the six inhabited continents.

Elop looks at record failing Nokia smartphone unit sales, record collapsing Nokia smartphone revenues, and hideously huge losses - for the full year the Nokia smarpthone unit generated a 2 Billion dollar loss, at one point in Q3 when pushing the Lumia series very hard, Nokia was making a 49% loss per smartphone sold! This compares to a 2 Billion dollar profit Nokia made just before this mad Microsoftian misadventure that Elop calls a new strategy. Elop sees collapsing sales, record-setting revenue crash and massively growing 2 billion dollar loss - and he says he is "very encouraged" that his strategy is now succeeding? That his strategy has "started to translate into financial results" Delusion is the type insanity where you are able to look at facts, refuse to accept them, and to substitute an imagined fantasy insteady of the reality.

WHAT DOES DELUSIONAL CEO DO?

Can a CEO be this mad? How can Nokia's Board accept the management of a madman? Why is Nokia led by the leadership of a lunatic? This is what happens if a delusional psycopath is in charge:

Nokia invented the smartphone and the first Nokia smartphone had a full QWERTY keyboard. Nokia's business-oriented E-Series on Symbian was renown for its wide range of QWERTY keyboards and the heavily texting-addicted youth were often selecting Nokia QWERTY based smartphones. About one in three Nokia smartphones sold globally have had QWERTY keyboards historically. Elop admits to having had 'internal debates' about QWERTY. The Lumia series has introduced 9 devices so far, not one of them has a physical QWERTY keyboard in any form factor. Elop has voluntarily abandoned one third of Nokia's loyal custoemr base with this one moronic move. Only a delusional psycopath looks at facts, is able to actively ignore the truth, and subtitute his own hallucination in the place of reality.

Nokia announces the new superphone the N9 with MeeGo. The press love the phone. After Nokia's share price has been in free-fall for five months, suddenly on the N9 news, Nokia's share price jumps 5%. Any sane CEO would celebrate and be seen everywhere with the new superphone. Elop announces to Finnish newspaper Helsingin Sanomat, that no matter how well the N9 will sell, Nokia will not release more phones to run on MeeGo. WTF ? Can you see Steve Jobs ever saying something that moronic? Can you see Steve Ballmer - hardly a rocket scientist among CEOs, himself listed as one of the worst CEOs in the world - but would Ballmer say, that if the next Xbox is a success, he won't do more of them? What CEO takes a highly praised product, and kills its future? Only a delusional CEO can do that.

Nokia's traditional stregth is the camera. Nokia's own internal surveys reveal, year after year, that the camera is the number 1 reason what Nokia smartphone buyers want when buying a Nokia branded smartphone. Nokia has had a 12 megapixel flagship smarpthone since 2010 and on Symbian, introduces the industry-shattering 808 Pureview with its 41 megapixel monster-sensor in 2012. And once again, Nokia itself says in 2012, that yes, Nokia customers number 1 request is the camera. Nokia wins best cameraphone year after year after year in survey after survey, from the N93 to the N95 to the N9 to the 808 Pureview. Yet the delusional CEO looks at the facts, and decides he has a better imaginary reality inside his head, and he regresses, releasing puny 8 megapixel cameras on THREE SUCCESSIVE flagships on the Lumia series. So bad, that even in 2012, the old 2010 Symbian based flagship N8 wins in side-by-side camera tests (and the N8 still registers in December 2012, among the top 5 bestselling Nokia smartphones sold in China for example when the phone is literally more than 2 years old and 9 newer Lumia phones have been released)

Nokia's biggest rival is Samsung. Samsung competes against top end smartphones, in mid-priced featurephones and in low-cost dumbphones. Samsung is the only rival to match up to Nokia in every country and in most markets Samsung and Nokia were numbers 1 and 2 back in 2010. When Elop wrote his Burning Platforms memo, Nokia was 50% bigger than Samsung in dumbphones and 4x bigger in smartphones. Elop in his memo lists many competitors - including Google who is perhaps Microsoft's rival, but as Google didn't make handsets, smartphones nor networking equipment, Google was not in any way Nokia's significant rival in 2010. But Elop ignored Samsung? Then in February 2011, when Elop was asked about Samsung, he said, he does not lose any sleep over Samsung !!! At that very moment, Samsung passed Nokia as the world's biggest handset maker. It had already passed Nokia as the world's biggest smartphone maker. Today Samsung is 6 times bigger than Nokia in smartphones and produces the second largest profits in handsets, behind only Apple. Elop said he didn't lose any sleep over Samsung. Delusion is the type insanity where you are able to look at facts, refuse to accept them, and to substitute an imagined fantasy insteady of the reality.

Nokia's MeeGo based 'Searay' handset is selected by Verizon as their Nokia return handset. Verizon love MeeGo and the Searay. Nokia has for years hoped to return to the US market. Any sane CEO would tell Verizon, you will get it. But Elop? He refuses to let Verizon get the Searay, and rather bastadizes the Searay, forces it to use Windows Phone - and when Verizon see the Lumia 800, they say no way. Nokia lose a year of Verizon sales. Only a delusional CEO can behave like this.

Nokia's N9 is released in September 2011 and immediately achieves in side-by-side tests, the astonishing rating by practically all tech tests, that it is better than the iPhone !!! There has never been a Nokia smarpthone that regularly beats the iPhone (the E90 Communicator was the last Nokia smartphone to manage it but only occasionally, not consistently). This is not just the only Nokia smartphone consistently ranked better than the iPhone, it is the ONLY smartphone by ANY BRAND to do that consistently. Also the MeeGo OS is rated superior to the iPhone iOS - something Windows, Blackberry, Android, Symbian etc have never achieved. So any reasonable CEO of course would rush to launch the N9 to every strong iPhone market like the USA, France, UK, etc. What does Elop do? He forbids the release of the N9 to any strong iPhone markets? Remember, this is at the time when Nokia is setting global records for smarpthone sales collapse and producing massive losses, with its factories idling. The N9 is a highly profitable smarpthone commanding premium prices. What idiot CEO refuses to let the N9 be sold? Only a delusional psycopath can look at the facts - that the new Nokia N9 is better than the iPhone - and then explicitly forbid its sale in any market where the iPhone is strong. What is wrong with Elop?

THe 808 Pureview is released in February 2012 and its demand highly exceeds Nokia production. The 808 Pureview instantly is heralded as the best cameraphone of all time. The 808 Pureview runs on Symbian using traditional Nokia strengths, and has lots of abilities and features that Windows Phone cannot support. The smart CEO would take the high popularity and visibility of the 808 Pureview, and rush to release a series of Pureview smarpthones, the 818 Pureview with QWERTY slider. the 707 Pureview with a slightly smaller sensor like 22 megapixels, but stll far bigger than any current rivals. And for Christmas 2012, produce the uberphone, the 909 Pureview with a 50 megapixel sensor, and optical zoom. Right? Nokia itself admits, the demand for the Pureview was far higher than Nokia anticipated. This is a hit phone! It won all awards in 2012 for best cameraphone. And most Nokia customers came in asking for a good camera. Any smart CEO would have produced a family of Pureview with Symbian, especially as Nokia factories are idling and Elop himself promised 150 million more Symbian while he has only delivered 74 million so far. And with no royalties paid to anyone, Nokia can do Symbian far cheaper than for example Lumia where Nokia has to pay a royalty to Microsoft. If the 808 Pureview was a failure, it makes sense to end it. If the Pureview is in such high demand Nokia can't keep up, any sane CEO would rush a series of sister products. But not Elop. Nokia now announced there will be no more Symbian based smarpthones, even as Windows Phone cannot support nearly all the features that make the 808 Pureview the best cameraphone on the planet.

Delusion is the type insanity where you are able to look at facts, refuse to accept them, and to substitute an imagined fantasy insteady of the reality.

I could go on and on and on and on. Nokia's CEO is delusional. He looks at Nokia performance and cannot relate to it. He does not see success as success, he seems to want to destroy any success he finds. Elop is to success what water is to fire. Elop found the strongest smartphone global juggernaut, and set it on fire like an arsonist. He then looks at the disasterous failure and calls it a success. Elop is dangerous as a CEO, not dangerous to his rivals, dangerous to his own employees, to his own Board, to his own shareholders and investors. Why is a delusional psycopath allowed to remain in control of Nokia?

For those who didn't like my little clown-faces, I have created a cleaner version of the picture. If you want to write about this story and use my pictures, you may prefer this one, haha. Feel free.

This picture may be freely shared

This was part 7 in the Nokia disaster. Elop has presided over the world-record collapse of a dominating juggernaut. Elop is literally the worst CEO of all time. Unfortunately this series is nowhere nearly done, I will return with more articles in the series, always one picture and one angle to the mess that did not exist before Elop, but what was caused by Elop.

(I need to point out, Nokia was in trouble before Elop, yes, Nokia corporation, not Nokia smarpthones. Nokia had trouble with 'execution' not its smartphones strategy. Nokia needed help in execution, delivering new phones on time and without bugs. Elop did not address those - his new Lumia phones have been plagued with more errors and bugs than any Nokia phones ever before, including the notorious N97. What Elop did, was to see that there was a problem, ignored it, and created a new problem. Its like a doctor, who arrives at an accident scene, sees that a patient has lost a leg and the leg needs to be cleaned and properly amputated. Then the doctor rather than attending the leg, decides to cut off an arm from the patient.. Elop has found problems at Nokia, ignored those, but created new problems of his own - wait, this is EXACTLY like Elop, the Delusional Psycopath)

Stay tuned, more troubles coming from the Nokia saga told one picture at a time. And for those who missed it, we have an 'Elop Firing Watch' on the blog, a contest to guess what date is Elop fired from Nokia. (that date cannot come too soon, and will probably be named a national holiday in Finland, haha) The contest has over 100 entries..

January 22, 2013

I've been working on that 150 times per day number. You may have heard it, Nokia was first to publish the number in 2010, saying that on average a mobile phone (not smartphone, any mobile phone) user will look at the phone 150 times per day. This not only in wild and woolly Finland, but across the planet. We had seen big numbers before, but they were all under 100 times per day and Nokia's bombshell 150 number was widely reported. And then, last year, T-Mobile USA verified the number for the US market as well - a market that severely lags the Industrialized World average in most things mobile - lagging often even many advanced Emerging World countries... So when the USA cellphone users (not smartphone, any cellphone) are looking at their phones 150x per day, thats getting pretty serious.

UPDATE OCTOBER 8, 2014 - Now there is finally a consumer survey published with a published number. A UK survey of only smartphone users (not dumbphones included) found as one might expect, an even larger number. The survey of 2,000 British smartphone owners found they look at their phones 214 times per day. Read more here.

And last year we heard that in the UK, the average smartphone user looks at the phone 200x per day. But lets not worry now about Angry Birds addiction. Lets remain with the basic phone - four out of every five mobile phones in use on the planet still today is a 'dumbphone' ie not a smartphone. I have been trying to validate the 150x number and I've gotten pretty close. So this is my 'argument' in support of 150 times per day. WHAT would a 'typical user' do with the non-smartphone today, that results in looking at the phone once every 7 minutes of every waking hour of every single day? I'll paint a scenario, using for the best part, consumer statistics on behavior on phones, or replacement behavior, plus some observations and personal experiences and chats with some fellow experts.

MESSAGING 23 TIMES

So lets start with the feature used by more than any other as a percent of all mobile phone owners. No, its not voice calls anymore, more people have abandoned voice call use, than don't use SMS text messaging. The primary use of a mobile phone (including smartphones by the way) is mobile messaging. So, what kind of behavior do I see that gets us 23 looks at the phone as a messaging tool. The average person does not send 23 messages per day..

Among active users of SMS, the number is 6 SMS text messages sent per day. If you send 6 messages, you average also receiving 6 messages from your friends. Thats 12 times right there. But what's the rest?

Once per day we draft a message we don't send, or draft a message and save the draft, to edit and send ti later (remember, these are pretty addicted users, who send and receive 6 messages daily). Then we re-read messages (yes! We all do!). So the saved message that we love or hate or didn't understand. I'd say on average 2 times per day we re-read a message we read before. Plus we'd receive perhaps 1 unsolicited message, an ad or alert or reminder etc. And then we anticipate! We check in case there has been a message that had arrived, maybe we are awaiting a reply, maybe we hope for a contact, etc. I say we look for a message that isn't there typically more often, than messages actually arrive - so that would be 7 times we seeked a message that hadn't arrived (yet). That gives us 23 times looking at a phone relating to messaging. (and please don't write about OTT services like iMessage, Whatsapp, BBM or Skype - these are all used by a tiny tiny sliver of the total worldwide population, only Skype reaches 1 Billion users, vs over 5 Billion active SMS users. We are not talking of heavy messaging fanatics on smartphones on WiFi or all-you-can-eat data plans, we are talking typical users worldwide. That means SMS, not OTT)

VOICE CALLS 22 TIMES

Then the voice calls. The average phone user places 3 calls per day and also receives 3 calls. Where are the other 16 times? Interruptions! We have a dropped call (1x per day) or we make a call attempt that won't go through (1x per day). We miss a call that was coming, too slow to pull the phone out, or forgot we had changed our ringing tone (yes, we all have done that too). I say 1x per day we miss a call. Avoid a call? Yes that we also do, we see whose calling, and decide not to talk, send the bastard to voicemail jail. Thats 1x per day. But you know what. We look at the phone we we start the call - we ALSO have to look at the phone to end the call. So out of the 7 actual phone calls, we have to end 7 calls, that gives us 7 more times to look at the phone. Now I'm at 17 times per day. Where are the last 5? Anticipation again. We look at the phone awaiting or anticipating a call or call-back. I'd say 5 times per day. That gives a total of 22 times we look at our phone relating to voice calls, per day.

CLOCK 18 times per day

If the average person sleeps 8 hours per night, that gives us 16 hours awake. I say we play with the alarm going to sleep and waking up, so out of the 16 hours, there are only 14 hours when we are reasonably awake and care about what time it is, when we don't fiddle with the alarm or snooze. And of that, we then have some moments on a typical day, that we are anxious about time - in the morning, going to work or school, worrying about being on time - and I'd say we look at the clock two times at that occasion, rather than once per hour. Same around lunch-time at work/school, when is this interminable meeting going to end, isn't it lunch-time already? And again, at the end of the work/school day - when we anticipate getting away from work/school. So on those occasions, I'd say conservatively that we look at the clock twice per hour, and on other times, we are curious about what time it is, roughly once per hour - often very habitually, and even subconsciously - so you know the story, the wife sees the husband just glanced at the watch, and asks him, what time is it, and he can't tell you, even though he just looked at his watch a moment ago... Anyway, I get 18 total times we look at the clock on the phone, not counting setting or resetting or shutting the alarm.

ALARM 8 TIMES

Which brings us to the alarm. I've been saying for years that the mobile is the last thing we see before we fall asleep and the first thing we see when we wake up. Its nice to see that was also verified by the Time global mobile survey finally in 2012. But yes, what of the alarm? To set it, I'd say the average person does that once, and then once before falling asleep, or waking up at night, or a little before the wake-up, looks at the alarm setting, just in case. Thats 2 times total. Then the wake-up alarm, 1x more. And then snoozing. I'd say average person snoozes three times? That gives us 6 uses of the alarm as a wake-up. But its not the only use of the alarm. We also use it as a convenience reminder during the day. I'd add 2 more uses of the alarm daily, once to set, once to turn off the ringing. That gives us 8 times we look at the alarm feature on the phone.

CAMERA 8 TIMES

Then the camera. Most of us are not shutterbugs who take dozens of pictures every day, but the consumer surveys suggest the average cameraphone owner takes about 1 picture per day. How do I get 8 times to look at the phone? First we have to launch the camera app. Then we have to aim the camera at our object. Then we take a picture. And we have to check if the picture turned out good. And likely it wasn't good enough. We take a second picture. And look at that picture, decide its a keeper. Then we delete the first pic. And finally, we randomly look or show a picture during the day. That gives me 8 uses of camera.

MUSIC PLAYER 13 TIMES

Not everybody uses music on the phone but nearly half of mobile phone owners do consume some kind of music from music streaming services to using the phone as an MP3 player to ringing tones. Lets take the music player option - nowadays a staple with very modest priced dumbphones already. And I think a typical user would find 4 times per day to listen to music. When listening, sometimes we hit a song we don't like or don't feel like listening to (or finishing) so we skip. I'd say we skip 3 times per day. Like a voice call, we have to turn off the music player when we're done, thats another 4 times we look at the phone. And I'd say on average we get interrupted once per day to pause the song that is playing - such as for an incoming call or message - and then resume the music. That gives me 13 times looking at the phone for music consumption.

GAMING 12 TIMES

For gaming, I'm now thinking basic time-killer games like Snake or Tetris, not Angry Birds. Launch the game 3 times, end the game 3 times. Interrupted twice, resumed twice, and looking at scores or settings 2 times per day. 12 times of use of the phone for gaming purposes.

CALENDAR 5 TIMES

I think a calendar might be used 5 times per day, once to make a new entry per day, 3 times to see whats up next, and once to edit or delete an entry.

SOCIAL MEDIA 9 TIMES

Accessing Facebook, Twitter of the like perhaps 5 times per day. As the usage tends to be longer, there is plenty of opportunities to be interrupted, so I'd say 2 interruptions and resumptions per day. Remember, we are talking of typical users, not heavily addicted youth, so the usage is not intense, also these users are not on 'all you can eat data plans' so their social media surfing is somewhat limited by the costs involved.

NEWS 6 TIMES

Nearly half of all mobile phone owners already consume news on their phones. It would mostly be on two primary types, the type where you go find the news ie access your fave news site(s) like the BBC or CNN or for pop music celebrity news, MTV etc.. And then there are the alerts you may subscribe to. I'd say 4 news alerts arrive per day and we actively go to news sites twice per day, for a typical user.

SEARCH 3 TIMES

And yes, increasingly we use search on our phones. But the search behavior is markedly different from PC based online access to Google and our other search engines. Mobile search is often urgent and very specific. But it often becomes the most valued app and service on the phone. A third of people in New Zealand have for example used mobile search to settle a bet or argument. Like I say, the mobile has become the Magical Truth Machine in our pocket. But lets say the typical user only searches 3 times per day on the mobile (remember, several hundred million internet users on mobile don't even own or have access to any PC based internet device, their dumbphone and its web browser and clumsy keyboard interface is the only internet they have access to - and at per-use data charging too!)

WEB 3 TIMES

And random internet services. Going to the website of the bank, or the travel agent, or the ecommerce site, or whatever. Again, I'd think this number is easily much bigger, but lets keep it at 3. Remember, these are NOT touch screen iPhon-a-clones, these are rudimentary basic phones, featurephones at best.

VIDEO 6 TIMES

Mobile videos are easily addictive and many carriers offer special video tariffs on their 3G data plans etc. We often receive links to videos, and videos can be sent and received via MMS. I'd say we watch 4 video clips per day, interrupted once, and resumed once. That gives us 6 uses relating to video. This also includes saved videos on our phones, something we shot on our own cameras, something that was forwarded to us, or perhaps moved via a microSD card or Bluetooth. And isn't it funny, we will look at that tired short video clip many many times when we have nothing else to do...

CHARGING PHONE 3 TIMES

And then the charging of the phone. We connect the phone, we come to see if its charged yet (not yet) and we remove the charger when the battery is full or we can't afford to wait longer. Three times we looked at the phone relating to its recharging, on a typical day.

VOICE MAIL 1 TIME

And we access our voice mails perhaps once per day. Remember, when one of our calls is redirected to voice mail, we are indeed using someone else's voicemail but it doesn't require us to do anything at our end, its just that the voice call was kind of hijacked by the voicemail system. But when we have to go listen to our voicemails, then yes, we have to make the extra effort.

If my math is correct, we are at 140 times per day. Then lets toss in random other uses about 10 times per day, including maps, downloading apps, voting for TV shows, using the torch/light feature (or turning the screen on in the dark for same effect), showing the phone such as placing it on a table, doing the SIM-card-switch, sending or receiving Bluetooth files, installing or removing microSD cards, replacing the battery, receving a mobile ad, making a m-payment like parking, bus ticket, lottery, or looking for a WiFi connection, double-checking battery status, etc etc etc etc etc.

That gives a totally plausible 150 times per day for a non-smartphone user who is not a massively over-addicted youth user either.

So what do you think? Did I miss obvious areas that have large usage globally across all ages and demographics - remember, we cannot focus on smartphones, only one in five mobile handsets in use today is a smartphone (but are now selling more than half of new handset sales in many countries, so this will change rapidly).

All analysis here not explicitly identified by source is source: TomiAhonen Consulting January 2013. The data and examples and calculations in this blog may be freely shared and also may be freely turned into any graphics.

And for those who need to understand the mobile market more deeply, check out the TomiAhonen Almanac 2012 - buy it now, get the 2013 edition when it is released in a few weeks, for no extra charge!

January 15, 2013

So its that monster year not just in mobile and tech, but in human history. We will experience the Mobile Moment this year, 2013. The moment in time when human evolution reaches the point, where a single consumer gadget exceeds the total human population by users. So we are now counting down to yes, the moment when mobile phone accounts, or 'subscriptions' or some may say 'users' or 'mobile phones' will exceed the total human population alive. Not measured in household penetration rates, nor of adults, but measured in total humans alive.

Never in human history has any gadget or technology achieved 100% penetration levels. Not cars, not motorbikes and mopeds, not even bicycles. Not the Walkman, not the CD player, not the television, Playstation, VCR, DVD player nor even radio. Not the PC, not the internet. Not even such basic necessities we all expect, like running water or electricity. The wristwatch may have seemed ubiquitous, but it wan't. It never reached every wrist. The pen and paper technology, basic pencils, do not reach the total human population because still 800 million adults on the planet are illiterate and have no use for such a technology. But even illiterate humans, beyond the reach of electricity are using mobile phones today. (yes in many parts of Africa and Asia and Latin America, schools provide free recharging service for mobile phones, as an incentive to have the parents send the kids to schoo. and get their phones recharged, for those living in villages and farms that don't have electricity)

But mobile. Mobile reached 6.7 Billion active accounts/subscriptions last year by December 2012, and grew from a little over 6 Billion, adding over 650 million new accounts ie grew new paying users by 11% in just one year. (Isn't this an awesome industry, the fastest-growing Trillion-dollar industry in human history, and the epicenter of all digital convergence). And how, this year, we will definitely add at least another 600 million, probably even more than that. So this is the historic year, when we will have the 'Mobile Moment'. A gadget or technology will grow to become bigger than total human population. Mobile accounts already are bigger than the populations of Europe, Oceania, Latin America, the Middle East and even North America. Asia is almost at 100% and Africa will reach 100% penetration rate level well before this decade is done (they are already past 70% penetration rate). Leading countries are past 200% like the UAE and Hong Kong.

So now we are on the countdown to the Mobile Moment. When will it happen? My current projections say it will happen in July of 2013. The planet is at 7.07 Billion humans and we are at 6.71 Billion mobile subscriptions now in January 2013. We are growing new mobile accounts at a rate of about 54 million per month.

Now, remember, the total mobile subscription count is not the same as actual mobile phones in use (that is less, as some will have multiple accounts but use one phone, and do the SIM-card-switch between different carriers/operators to save in costs or optimize in telecoms traffic behavior). Also remember, because some of us have two phones, and others who have one phone have more than one account, and as some of the mobile accounts are actually machine-accounts (electric meters, watering irrigation systems, healthcare warning systems etc) the actual number of 'unique users' as human beings is well below that magical number. But these are the numbers at the end of 2012:

Lets see as the numbers start to come in. I expect some analysts to jump on the mobile moment number earlier, and also, that as we'll hit the 7.0 Billion active accounts number before technically passing human population count at almost 7.1 Billion, we may see the seven billion number celebrated around May or June.

But yes, this is the monster number coming this year. It will be widely reported and a lot of pundits will give their commentary on fhis pervasive technology. So a few quick thoughts - most of those phones in use are not smartphones (only 1.1 Billion were at the end of last year). The number 1 used service on those mobile devices is no longer voice calls, it is SMS text messaging. More than two out of three phones in use is a cameraphone so for most humans on the planet, the only camera they have ever used, was on a phone, not a stand-alone Canon or Nikon or Olympus haha..

As to services, more than a third of these mobile phone users access the internet on their phones at least part of the time and nearly a third access news on their phones. 60% of mobile phone owners have received advertising on their phones already so mobile is becoming the biggest advertising platform by reach, totally dwarfing television, print and the PC based legacy internet, and rivalled only by radio anymore. And yes, obviously, all data in this blog may be freely shared and re-used and translated and turned into infographics etc.. Please provide links back here if you do and also tell me via Twitter - I am @tomiahonen of course - and I'll tweet links to your articles that talk about these numbers.

I'll be giving you a lot more data on the mobile industry as we near the publication date for the brand new TomiAhonen Almanac 2013 edition, but if you wanted all the mobile data in an ebook/mbook that you can save on your tablet, laptop or smartphone - now's the time to order the TomiAhonen Almanac 2012. Anyone who buys the old edition now, gets the new edition also, for the same low price of ony 9.99 Euros. A great value on the 180 page statistical compendium of all major mobile industry stats. So check out the TomiAhonen Almanac 2012.

January 11, 2013

The Nokia Q4 smartphone sales numbers released yesterday took me a bit by surprise, so we spent most of yesterday on the blog and on Twitter talking about the newest numbers. But now returning back to our series of One Nokia Problem Discussed In One Picture, today lets look at the transition from Symbian based Nokia smartphones to Windows Phone on Lumia.

A lot of people seem to be celebrating the 4.4 million Lumia smartphone sales number as if its 'good news'. They clearly don't know the industy or Nokia's past. Nokia did 4.4 million smartphones not per quarter, but per every two weeks back before the Elop Effect. The last time Nokia introduced a new Symbian version operating system - like the new Windows Phone 8 right now - was when Nokia introduced Symbian S^3 for Q4 in 2010. How did it do? In the first quarter, it sold 5 million units, led by its flagship, the N8 which sold 4 million units. Now, even as the smartphone market is more than twice as big, Elop's 'magnificent' Microsoft marvels on his Lumia series - after five months of trying, including not one but two new operating system versions and not one but three separate flagships - have yet to match that 5 million sales per quarter.

The 4.4 million seems like a big jump from the miserable Q3 when Nokia managed only 2.9 million Lumia, but bear in mind, that in Q2 of 2012, Nokia sold 4 million Lumia, so in the last 6 months of massive global Nokia/Microsoft Lumia/Windows Phone push, including new carriers announced and new operating systems released, Nokia grew Lumia by.. 10%. yes, a lousy 10% growth for Lumia in the past 6 months while the industry grew in the same period .. get this .. by 57%. You wanna call that a success? I don't, and I won't.

So lets go to the migration ie transition rate then from Symbian to Windows Phone. Elop promised when he released this risky Microsoft strategy in February 2011, that he will achieve 1-to-1 transition from Symbian to Windows Phone. Now we have seen Symbian at its last viable quarter, so its about time to count, did the migration succeed then. Here is the picture:

The above picture may be freely shared

Yeah. The promised transition from Symbian to Windows Phone has not succeeded anywhere near 1-to-1. Its not even doing 1 out of every 2, or even 1 out of every 4. If we measure by unit sales, and ignore the growth in the smartphone industry for the past 2 years, and try to paint this misery in the best possible light for Elop's misguided Microsoftian misadventure, then by unit sales, Nokia sold 28.8 million smarpthones per quarter as the strategy was announced, and today 2.2 million of those smartphones are still on Symbian. Out of the 26.6 million Symbian sales attempted to migrate to Lumia running Windows Phone, there are only 4.4 million that succeeded and 22.2 million loyal Nokia smartphone users on Symbian, that were scared away to buy a rival handset maker's smartphones, Samsungs and others on Android, Apple's iPhones, or Blackberries or whatever others. By unit sales, the failure rate of Elop's Microsoft strategy is 83% only 17% have succeeded. So only one in six existing Nokia customers were migrated successfully to Windows Phone. Thats one way to look at it, the 'rosy' view. How about the reality view? Brace yourself.

If we measure by market share, Nokia had 29% market share when the new strategy was announced. This measure accounts for market growth. So today, Symbian based smartphones only account for 1% of global sales, and Nokia therefore has attempted to transition the 28% of its smartphone customers it had using Symbian to Windows Phone. And now the successfull transition results in 2% market share for Lumia in Q4 and 26% of Nokia loyal smartphone user market share gifted to rivals, in scaring away loyal Nokia users to Android, iOS, Blackberry, bada and others. Now the failure rate of Elop's strategy is a mindboggling 93%. Yes, only 7% of Nokia's attempts to lure Symbian customers to Lumia has succeeded. Out of every 14 attempts to migrate a customer from Symbian to Windows Phone, 13 have run away. Only one in 14 attempts to transition to Lumia has succeeded. You call this strategy good, and worth pursuing?

The independent survey of Lumia owners in America by Yankee Group last year found that four out of ten Lumia owners hated the phones so much, they gave it a rating of 1 out of 5 where 5 is best, 1 is worst. And now we have the Bernstein study of smartphone users by platform, in USA and Europe, which found that only 37% of Windows Phone smartphone owners are willing to make their next smartphone purchase another Windows Phone (most of those are Nokia owners, Nokia has been selling about 75% of all Windows Phone smartphones, the other 'partners' are either completely abandoning the Windows ecosystem like Sony, LG and Dell, or severely cutting down their involvement like HTC or pursuing other platforms like Samsung, or simply no longer providing new handsets for Windows Phone 8 like Huawei and ZTE). Yes, 63% of current Windows Phone owners want desperately to get rid of their phone and replace it with anything else! Compare that to Android which has 75% loyalty or iPhone which has 95% loyalty according to the Bernstein survey. Even poor old beleagured Blackberry has 57% loyalty, far bigger than Windows Phone and look how badly RIM is doing with its current model line. (And yes, in 2010, prior to the Elop Effect, Nokia's Symbian based consumer satisfaction was second highest in the industry, behind only the iPhone. Nokia customers were very satisfied and loyally bought Nokia after Nokia after Nokia).

So lets take a new look at the same graph I prepared, and add the Bernstein finding. This is the best case of how Elop's Windows strategy has going forward, the green part is the only slice that Elop has been able to win over to remain with both Nokia and Windows Phone on his Lumia series.

The above picture may be freely shared

So yes, when we add the severe dissatisfaction with the Windows Phone operating system and Lumia by their first owners, almost two thirds want to get rid of their Lumia and take some other, any other operating system based smartphones instead of their Windows smartphones, on both sides of the Atlantic, then yes, this strategy is utterly doomed, not just failing now, but into the future. Because, look at the 'real picture' ie taking market growth into consideration, the right side graph - market share. Stephen Elop's mad Microsoftian misery has managed to migrate from totally satisfied Symbian Nokia users - Nokia grew smartphone sales 53% from 2009 to 2010 - to now, only one in 20 loyal Nokia Symbian users who were tricked into converting to Windows Phone, both arrived there and is intending to stay. 17 of those 20 have already been scared away and 2 of the remaining 3 are already decided, they will not remain with Lumia series longer. This is the very definition of textbook strategy failure.

The Windows Phone strategy has failed comprehensively. Nokia knew this strategy was extremely risky, they wrote a massive risks assessment, hundreds of itemized risks to the strategy, in their filing to the SEC and New York Stock Exchange two years ago. And Nokia listed various reasons why the transition might not result in a 1-to-1 migration from Symbian to Windows Phone. Those risks have come true, but the carnage to Nokia is worse than anyone could have anticipated. I had issued the most pessimistic forecasts for Nokia's preformance in 2011, and many derided me for those forecasts at the time. Now we can see that my forecasts turned out to be too rosy. The collapse of Nokia's smarpthone business has set a new world record for failure. Even we forecasters had no model to compare it to, nobody had ever failed this totally in any two year period, not in mobile phones, not in cars, not in soft drinks, not in airlines not in personal computers, never in any industry.

Now look at that graph. If this is the 'success level' for Lumia's transition - failing in real terms 93% of the time, or out of every 14 attempts, 13 fail - and of the remaining suckers who took the fool's gold peddled as Nokia Lumia smarpthones, two thirds hate it so much they will buy any other smartphone than Windows Phone next time, why would you think this 'strategy' can somehow turn into a success under Elop and running Windows Phone? No wonder Elop now is letting rumors spread that Nokia is considering Android instead of Windows Phone. No wonder Steve Ballmer at Microsoft has given up on Elop and Nokia, and is proceeding to build his own smartphones. And it is now no surprise that Elop desperately is peddling any story to trick journalists into believing Nokia is ok, such as reclassifying Nokia's S40 based featurephones on his Asha series as if they were smartphones. Sure, I can also call an Etch-a-Sketch a smartphone, it doesn't make it one. Luckily all major analyst houses are rejecting that silly claim.

The simple fact is, that looking at that picture, it is obvious that Elop has failed totally in his primary goal of his strategy. He did not fulfill on his promise. 19 out of 20 loyal Nokia Symbian smartphone customers have either already left, or have already decided not to continue with this unsatisfying smartphone experience. Its about time for the Nokia Board to wake up and fire this Microsoft Muppet.

That was the discussion of the risk that Nokia might not be able to convert its loyal Symbian user base 1 to 1 from Symbian to Windows Phone. Boy was Nokia correct in testifying to the SEC and NY Stock Exchange, that this Windows strategy was very risky. They were correct and yes, this risk has fully materialized. The strategy is simply doomed.

This was number 4 in my series of blogs about Nokia's strategy distaster, told in short snippets of one problem at a time, and illustrated with one picture. You may fully use any parts of this blog including the stats and the grraphics.

I will return soon with part 5, trust me, this is a disaster that keeps on giving and giving, but what do you expect, we have truly witnessed a World Record being made in management failure and incompetence. There is plenty of blame to lay on Mr 'Call Me The General' Stephen Elop, the Pretend-Patton Canadian, graduate of McMaster University, previously with Microsoft and now Nokia CEO.

Available for Consulting and Speakerships

Available for Consulting & Speaking

Tomi Ahonen is a bestselling author whose twelve books on mobile have already been referenced in over 100 books by his peers. Rated the most influential expert in mobile by Forbes in December 2011, Tomi speaks regularly at conferences doing about 20 public speakerships annually. With over 250 public speaking engagements, Tomi been seen by a cumulative audience of over 100,000 people on all six inhabited continents. The former Nokia executive has run a consulting practise on digital convergence, interactive media, engagement marketing, high tech and next generation mobile. Tomi is currently based out of Hong Kong but supports Fortune 500 sized companies across the globe. His reference client list includes Axiata, Bank of America, BBC, BNP Paribas, China Mobile, Emap, Ericsson, Google, Hewlett-Packard, HSBC, IBM, Intel, LG, MTS, Nokia, NTT DoCoMo, Ogilvy, Orange, RIM, Sanomamedia, Telenor, TeliaSonera, Three, Tigo, Vodafone, etc. To see his full bio and his books, visit www.tomiahonen.com Tomi Ahonen lectures at Oxford University's short courses on next generation mobile and digital convergence. Follow him on Twitter as @tomiahonen. Tomi also has a Facebook and Linked In page under his own name. He is available for consulting, speaking engagements and as expert witness, please write to tomi (at) tomiahonen (dot) com

Google Search

Communities dominate brands

The WWW

Tomi's eBooks on Mobile Pearls

Pearls Vol 1: Mobile AdvertisingTomi's first eBook is 171 pages with 50 case studies of real cases of mobile advertising and marketing in 19 countries on four continents. See this link for the only place where you can order the eBook for download

Tomi Ahonen Almanac 2009

Tomi Ahonen Almanac 2009A comprehensive statistical review of the total mobile industry, in 171 pages, has 70 tables and charts, and fits on your smartphone to carry in your pocket every day.